House sales cash 'being clawed back'

THE GOVERNMENT has been accused of clawing back pounds 150m to be raised from council house sales next year which it had promised local authorities could spend.

Matthew Warburton, of the Labour-controlled Association of Metropolitan Councils, said the government housing investment programmes, announced yesterday, amounted to 'a wonderful piece of window-dressing'.

He claimed the Government was taking back pounds 150m by cutting the amount councils could borrow and was also stipulating how a further pounds 120m of an expected pounds 650m of capital receipts must be spent. Together the measures removed much of the freedom apparently granted to councils by the Government after the Chancellor's Autumn Statement.

The Institute of Housing said the investment levels showed a continued squeeze on councils. John Perry, the institute's head of policy, also complained of the 'beauty contest formula' being used. Money was not being concentrated in areas of need but where local councils' performance was favourably judged.

Sir George Young, the Minister for Housing, rejected criticisms of the investment programme, which he said amounted to pounds 1.9bn for next year. He claimed the clawback was a system of redistribution. Money was being taken from councils expected to raise most from house sales and given to authorities expected to raise less. He also said that it was right to reward councils which performed well and to withhold resources 'to some degree' from authorities which needed to improve.