Council housing gets pounds 3bn windfall

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A "NEW AGE of urban renaissance", spearheaded by a return to council housing, is to be announced by John Prescott, the Deputy Prime Minister, after he secured approval by the Chancellor to spend more than pounds 3bn of council housing receipts on a rolling programme of maintenance and new building up to the general election.

Maintenance will be stepped up on the existing housing stock, which is run-down and depleted. And the report by the architect Lord Rogers on "brown field" sites will be used to identify land for an urban "renaissance", Mr Prescott said.

The scale of the programme could be reminiscent of the early Fifties, but he has made it clear that he will be signing no blank cheques for new housing. Safeguards on accountability, to avoid allegations of Labour town-hall "sleaze", and tougher deals to reduce the cost of council housing by private builders are to be proposed in separate policy papers on the construction industry and local government reform in July by Mr Prescott's Department of Environment, Transport and the Regions.

The money is to be released over the three years running up to the general election on top of the pounds 800m already earmarked from housing receipts in July as part of Gordon Brown's comprehensive spending review, which will place housing among the top four spending priorities, with education, health and transport.

But Mr Prescott is seeking to go further than the election manifesto commitment to spend pounds 4bn in council house receipts. He is pressing the Chancellor to make a radical change in Treasury rules to allow local authorities to raise money in loans, on their income from rents, for building more housing.

A coalfield communities report will lay the groundwork for new environmentally friendly coalpit developments. "We can't stand aside and see them being destroyed," he said. "I am looking to a new age of urban renaissance."