All councils in England should be able to retain income from council house rents in order to plan for better quality housing in the long term and improve services to tenants, according to the Chartered Institute of Housing (CIH).

CIH wants to end the process of redistributing overall revenue between councils. The professional body for people working in housing also wants councils to have the power, together with tenants, to set their own rent levels, within guidelines. Councils should also be able to keep any surplus income at a local level. These points were raised as part of CIH's submission to the government review of the Housing Revenue Account, the current system of council housing finance.

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CIH wants the new system to put all councils on a level playing field. CIH is also calling for the government to address the issue of historic debt, for example by redistributing the debt between local authorities, based on an assessment of ability to pay. Without this, moves to a devolved housing finance system will not be viable or acceptable.

Reform towards a devolved system would allow for local authorities to become more autonomous and flexible, to plan long term to meet local priorities, maintain their housing stock, lever additional funding for investment and provide additional services to tenants. With autonomy, councils should ensure that housing plays its role in the overall place-shaping agenda and that residents have greater control over the services delivered.

Sarah Webb, CIH Chief Executive, said: "Councils will be in a much stronger position to drive up standards and meet tenants’ expectations if they have stronger, more effective control of their annual income. Reform will also enable local authorities to respond to the housing reform agenda, for example by offering different services to individual tenants.

"The safeguards put in place by the new regulator for all social housing, the Tenant Services Authority, should give confidence that these wide-ranging reforms can take place without risk to tenants or councils."

(CD/JM)