Model resolution

We have circulated the following model resolution aimed at local Labour Parties with a view to them passing the resolution and sending it forward to the September Labour Party conference.

Model resolution for Labour Party conference

Local authority Housing Revenue Account under-funding

This conference recognises that local authority housing revenue accounts (HRAs) are seriously under-funded as a result of

1) The £13 billion extra ‘debt’ imposed on councils in the 2012 ‘debt settlement’. This so-called debt is the result of manipulation by the Treasury over many years. In reality tenants have paid more in rent that the historic costs of borrowing to build. This was shown by the House of Commons Council Housing Group which reported that between 1994/5 and 2008/9 council tenants paid £31 billion more in rent than was received by councils in annual ‘allowances’. This was more than outstanding historic debt.
2) Coalition and Tory government policies since 2012. The so-called debt each council was given was based on an estimate of rent income over 30 years and the projected RTB sales. The government changed the rent formula twice including an annual rent cut for four years. They also increased the discount of RTB sales which increased more than fourfold, meaning councils losing far more rent than was projected in the 2012 settlement. As a consequence of these changes individual councils are facing the loss of hundreds of millions of pounds over the course of their business plans.

This means that council HRAs have insufficient income to maintain existing housing stock and to renew key housing components in good time. As a consequence the condition of the housing stock and tenants living conditions will deteriorate.

In order to resolve this funding crisis Labour will

1) Highlight the responsibility of the coalition and Tory governments for this funding crisis and demand that the government use its powers under the 2011 Localism Act to ‘reopen the settlement’. The current debt should, at least, be cut in line with projected losses of rental income resulting from coalition and Tory government policies since 2012.
2) Commit to cancelling all HRA debt held by the Public Works Loans Board, when elected to government.

A Labour government will end the historic injustice of debt being manipulated to fleece tenants who have to pay for servicing it, by cancelling this fictitious debt.

You can download a copy here modelresolutionhradebt

There is also a summary of the issue.