Council seeks to lease its housing stock to plug decent homes funds gap
Brighton to lease homes after stock transfer rejection
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A council is preparing to use an untested legal loophole to sidestep government resistance to a scheme to raise £45 million of private housing finance.
Brighton & Hove Council needs the money to help bring nearly half the council’s 12,000 homes up to the decent homes standard, after tenants voted in 2007 against transferring their homes to a housing association.
Instead, the local authority plans to lease up to 499 of its properties to a not-for-profit company for use as temporary accommodation. The company, Brighton & Hove Seaside Community Homes, would borrow money to pay the lease and refurbishments.
The council says it has received a letter of intent from one of the ‘big four’ high street banks to lend up to £45 million. It says this would be enough to plug the funding gap for all the decent homes work the city needs.
But the local authority has been unable to secure ‘express consent’ from Communities Secretary John Denham to lease its homes to the company. Maria Caulfield, cabinet member for housing at the council, said: ‘They [Communities and Local Government department] have concerns about whether temporary accommodation is the best use of the stock.’
She said the council replied to CLG’s concerns at the beginning of June and have ‘heard nothing since’.
Brighton & Hove now believes it has found a legal loophole to circumvent the problem. If the properties are to be used for temporary accommodation for people with special needs - which can include those with alcohol problems, tenants with disabilities or victims of domestic violence - the transfer does not need secretary of state approval, claimed Ms Caulfield.
‘My understanding is it hasn’t been done before and we would have to get counsel’s advice to make sure we weren’t open to legal challenge from the government,’ she added.
The council is consulting tenants on whether they are happy with ‘plan B.’
A spokesperson for the CLG said it had refused consent for Brighton’s original proposal because it did not believe the vehicle was sufficiently ‘arm’s length’ from the council. She added that the department would wait for the ‘final form’ of the proposal before the secretary of state decided on whether to grant consent.
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Readers' comments (4)
Jim Paton | 11/09/2009 7:14 pm
Either Maria Caulfield doesn't know what she's talking about or the facts in this story are muddled. The council will not remain the landlord of homes it has leased to an intermediary body. That body will the the tenants' landlord whilst the council will be merely the freeholder, retaining only a "reversionary interest" which will be of little or no relevance until or unless the lease comes to an end. Will these be fix-term or periodic leases? If the former, for what term?
Does Maria Caulfield understand what a lease is? If the council was to remain the tenants' landlord, then the new body would be merely a managing agent (an ALMO in trendy speak) rather than a lesee.
There seems to be confusion here between being the tenants' landlord and the landlord's landlord. Only in the former case does it make any sense to say the council "remains as the landlord".
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michael barratt council tenant | 14/09/2009 8:31 am
It would seem that Brighton and Hove's outlined plan is trickle treat privatisatisation by the back door. A ploy that disregards the wishes of 77% of tenants who said no to the privatisation of the Council housing stock in spite of every trick in the book being pulled to obtain a transfer manadate.
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"GRANDAD" Elected Tenant Representative Brighton & | 23/09/2009 10:33 pm
This type of Mini-Transfer was tried in Newham Borough London and resulted in the Authority having to be "Bailed Out" by an RSL called "Open Space" with the result that Newham LOST 1000 of it,s Social Housing Units. The Tenant Representatives of Brighton & Hove have repeatedly requested a meeting with the Officers of that Authority to compare our Council,s scheme with the one that Backfired on them...But have been repeatedly refused that meeting...WHY?
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Maggie King | 24/09/2009 1:24 am
Who is suggesting that the homes to be leased to the LDV (106 of which are unfit for habitation) the rest chosen because of their poor state of repair and with no money available to bring them up to decent home standard, would be used for vulnerable people such as the disabled? Obviously one of the "think themselves lucky they have a roof over their head even if it leaks" brigade who disregard the Disability Discrimination Act at every opportunity.
The setting up of the Brighton & Hove LDV was seen as one way to raise money to improve the homes of council tenants and has involved tenants from the beginning. The Board is made up of 4 elected tenant representatives, 4 Councillors and 4 independants chosen by the tenant and council board members. It is government dictum that tenants be central to all decisions affecting their homes. So how more tenant-led could the LDV be and why would any tenant reject any project that would improve their home?
The view of many tenants who voted NO to stock transfer is that we are being 'punished' because we dared to oppose the government think-tank that convinced itself that by spending a million or so on propaganda, tenants were so stupid they could be led to vote yes to transfer of their homes to some housing association.
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