Construction union UCATT has welcomed the announcement by Housing Minister John Healey that the Government will dismantle Housing Revenue Accounts.

A new self-financing system for councils will mean they will be able to keep all rent receipts and monies received from right to buy.

The reforms will mean that councils will have an additional 10% more money to provide better housing.

Alan Ritchie, General Secretary of UCATT, said: "These reforms are extremely significant and a much needed boost to council housing finances. Councils will have greater resources to improve their existing housing stock and will have greater opportunities to build new homes."

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UCATT have long campaigned that existing funding rules were unfair; it meant that some of the income generated from council housing rents was diverted to central government or other councils. This led to many authorities being unable to adequately maintain their existing housing stock.

Last year the Government provided additional funding for councils to build new housing and it is anticipated that John Healey's new measures could increase new build capacity by up to 10,000 homes per year.

Mr Ritchie, added: "This is another example of clear dividing lines between a Labour Government acting in the interests of many as opposed to the Conservatives who would let council housing wither away through under funding. John Healey has acted in order to help kick-start the housing industry, help ensure skilled construction workers get back to work and tackle the growing level of homelessness."

(CD/GK)