Give them a big hand

It is an apt metaphor for the reaction of much of the housing sector to a series of eye-catching pledges from Mr Healey and Gordon Brown this week.

The prime minister has been as good as his word and, with a £1.5 billion housing package as the centre-piece of his relaunch, has delivered on his promise when he took office to ‘…make affordable housing one of the greatest causes of our time’.

Were there a general election tomorrow, there’s a fair chance Mr Brown would win this particular constituency.

So what now? There is little time for the dust to settle before Mr Healey publishes his consultation paper on the HRA changes ahead of parliament’s summer recess in four weeks’ time.

Here is what the paper must address. First, the issue of how the current £17 billion of debt held by English council housing departments is to be shared out among all 202 councils in the system.

Although this approach always looked the most likely pick of those put forward by the team of consultants who led the long-running HRA review (writing the debt off, as the LGA demands, is a non-starter), it will be tough to convince debt-free councils to shoulder some of the burden - even if they are in effect already servicing it through the current labyrinthine HRA arrangements. As we report, the Conservatives have already expressed unease at this.

Second, Mr Healey will need to clarify whether or not councils will have freedom to set their own rents. There are some obvious problems here, including the risk of increasing the government’s housing benefit bill and protecting vulnerable tenants from exorbitant rent hikes. But these are surmountable and Mr Healey should continue in his current bold vein.

Third, Mr Healey makes reference to other social landlords - arm’s-length management organisations and stock transfer housing associations - and moots potential changes of emphasis here. The consultation paper presents a good opportunity to outline his full intentions.