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If ever there was an activity almost specifically designed for parliamentary "anoraks" it is ploughing through the details of local government bills. Comprehensive performance assessment, ring-fencing, non-hypothecation, standard spending assessment – the jargon is so pervasive that an entire debate could be held in a language incomprehensible to the intelligent observer. The desire of governments to control the 25% of national public expenditure that passes through local councils and to demand value-for-money measurement of delivery of services has led to a panoply of state regulation.

Now parliament is at it again. The new local government bill weighs in at 123 clauses and seven schedules – and that is before it takes on board the Bain recommendations about the fire service and the repeal of the much fought-over Section 28 concerning gay relationships.

The government proclaims that the bill is a flagship measure delivering "freedoms" to local councils. In part this is true. In future councils will be able to raise additional capital (that word "additional" is important because the bulk of capital funding will still come from the centre) on their own initiative, subject to prudential rules and provided they can service the debt.

Any idea that this might provide an alternative route for capital investment to the PFI is rapidly dispelled by the illustrative list of projects trotted out by local government minister Nick Raynsford – improvements to residential care homes, grants for family centres, environmental schemes to encourage household recycling, enhancements to street lighting or car park security, and so on.

But politics is like physics – for every force there is usually an equal and opposite force, and the opposite force in this bill comes in the shape of its provisions for housing finance. The government is taking powers to confiscate or "pool" capital receipts and redistribute them. At the moment councils are obliged to commit 75% of such receipts – which come from right-to-buy or large-scale voluntary transfer – to paying off debt. The remainder is free for use as the council thinks fit. Debt-free councils have the full use of the receipts. The government's intention is to leave LSVT receipts untouched but to pool 75% of the receipts from right-to-buy sales by both debt-free and indebted councils.

Although the big receipts come from LSVTs, the stream of cash from the sale of council houses and flats adds up to much more. LSVT receipts in England this year and last are expected to have run at about £350m per year. But last year's cash from right to buy was about £1.5bn in England, probably climbing to £1.8bn in this financial year (perhaps stimulated by worries about restrictions to be introduced by John Prescott) and then settling at an average of about £1.5bn a year.

Clearly, the government’s enthusiasm for freedom does not extend to councils determining the use of their own receipts

So the pool will be a substantial one, although moves to tackle "abuses" of council house sales could cut receipts if it discourages transactions.

But having decided to nationalise the receipts, the government has not yet said how it intends to spend them. All Raynsford would say was that: "Authorities with a genuine need to spend on housing investment can look forward to the new framework with confidence … there is no reason for them to feel nervous about any reduction in housing investment." But of course, that begs the question: investment where?

Not, it appears, in Ashford or Stevenage. Raynsford chided Ashford for spending less than half its receipts for the past three years on housing, preferring to keep the council tax down instead. Stevenage, Raynsford complained, had received £14.4m more in capital receipts over the past three years than it had spent on housing investment. Clearly, the government's enthusiasm for local authority freedom does not extend to councils determining the use of their own receipts.

The bill makes a second, much less controversial change to housing finance. Rent rebates are being removed entirely from the housing revenue account. Where local authorities have a surplus of income over expenditure within the account (and the calculations are notional) these surpluses will be pooled for redistribution. Since the sum involved is believed to be below £15m, this is small change indeed – though no more palatable to the "losers" for all that.

Finally, all local authorities will be obliged to produce a single housing strategy covering everything from transfer to homelessness. This will do little more than bring under a single umbrella the multiplying demands for individual strategies that already exist.