Experts claim radical housing finance rethink has ‘closed the door’
Subsidy changes to end stock transfer
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Stock transfer will become almost a thing of the past following major reforms to council housing finance, according to financial experts.
Under a radical blueprint for the housing subsidy system unveiled by housing minister John Healey last week, local authorities will be handed full control of their rental and sales income.
Over the last 18 months a number of councils with arm’s-length management organisations have considered transferring their stock because decent homes funding was ending. Even those councils and ALMOs with reasonably advanced transfer proposals may now rethink.
Steve Boyd, managing director of Stockton-on-Tees ALMO Tristar Homes, said it was looking to go to ballot on its stock transfer proposal next summer in order to secure badly needed investment. But he added: ‘If the minister’s proposals could be immediately implemented, Stockton might change its mind.’
Steve Partridge, executive director at the Housing Quality Network, said transfers would still work if large-scale investment was needed.
However, the ‘overwhelming majority of councils will be able to sustain their council housing for the long term,’ added Mr Partridge, who helped advise the government as it was drawing up its plans.
David Hall, a director at consultancy Tribal, said that by warning that future transfer proposals would not receive additional financial support, Mr Healey had ‘effectively closed the door’ to new stock transfers, meaning there would be fewer in the future.
Mr Partridge questioned whether the government would need primary legislation to reform the housing revenue account subsidy system.
He said that they had got the powers within the 1989 Local Government and Housing Act and the Housing and Regeneration Act, ‘so I don’t know what more powers they really need’.
But a spokesperson for the CLG said primary legislation would be needed because powers under H&R Act related to individual councils and would be difficult to apply to a national change.
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Readers' comments (6)
Mr Sharabi | 10/07/2009 1:43 am
Once local authorities are in full control of their rental and sales income, does this mean that any surplus land they own can now be sold to RSLs / Developers to meet local housing targets as well as improve the co-ordination of regional development strategies via the HCA?
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Bernard Townroe | 10/07/2009 8:11 am
Isn't that happening anyway and has done for years?
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Olite | 10/07/2009 9:01 am
Bernard's right. It's been happening for years. What will change is that local authorities can now build on their land themselves if they want. There is now less pressure to sell to RSLs/Developers to meet local housing targets.
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just a tenant | 11/07/2009 6:17 am
There is a very good reason why the government have decided to do this, a mass exit of LA homes through transfer, in one guise or another, is losing the government money each transfer made is a loss in revenue from the HRA subsidy, an extra tax!!!! This is why the discussion at the moment is how it can distribute the 17bn debt amongst the 202 Councils with stock retention. Some of us are currently paying almost half of collected rent to the government, how are they going to raise this money if more and more of us choose to opt out of the LA and go it "alone" that's why they want to stop transfer........no other reason, the only LA with retained stock will be those that have benefited from the subsidy, why would they want to opt out? Don't penalise us that do want to change our Landlord, I thought the future of social housing was about choice, you will be leaving the remaining LA tenants vulnerable and without choice if you take away our current right to choose our landlord.
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Just a Tenant | 11/07/2009 6:25 am
Could someone please tell me.
1/ How much will it cost each LA to pay back their share of the 17bn debt???? We are currently losing approx 49% in the subsidy system 49p in the £ is paid to government how much in the £ will we have to pay for the ONE OFF DISTIBUTION OF THE 17bn.
2/ Will the rental and sales income continue to be ringfenced to ensure it funds exsisting and new social housing? and how will this be monitored.
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Martin Ballard | 11/07/2009 3:18 pm
Thus councils might be able to use their land to maximise council house building 100% rather than desperately selling off land to be thrown a bone of say 25% "social" housing.
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