The Chartered Institute of Housing (CIH) has welcomed the announcement that the archaic and unfair council housing finance system is finally being dismantled in order to pave the way for a new council house building programme and improvements that will make a difference to the lives of millions of existing and future tenants.

The detail of the settlement for local authorities in England is yet to be fully examined, but CIH is confident that John Healey's offer will be firm enough to allow councils to make better, more locally-based and longer-term decisions about the upkeep of existing homes as well as leading to the building of significant numbers of new homes in their areas.

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CIH has campaigned for more than five years to see the Housing Revenue Account subsidy system replaced with a fairer system of self-financing and welcomes the Government’s commitment to allow councils in England to keep council house rents and proceeds from all sales to invest in building up to ten thousand new homes per year.

While CIH welcomes the long overdue commitment to new council house building, CIH cautions that if grant is not available to support the work, investment in new build will be limited significantly in the early years, given the restrictions on borrowing for local authorities that are still in place.

Sarah Webb, CIH Chief Executive, said: "We are delighted at the Government's clear commitment to new council house building and are also very pleased that our work to help shape a new self-financing future for councils has been taken on board. We are calling on the Government to honour its commitments to existing tenants and communities and also ensure that sufficient capital finance is available to get the existing council housing stock and estates up to a standard where they are all attractive places to live."

(CD/GK)