Wednesday, 03 September 2014

Liquid assets

From: Politics watch

Is the government planning to use money from selling off council housing to ease the national debt?

It seems a little unlikely, but it is one view of an odd exchange between Liberal Democrat Treasury spokesman Vince Cable, and chief secretary to the Treasury Liam Byrne, which took place on Monday.

It is certainly an interpretation that occurred to shadow housing minister Grant Shapps, who pointed the relevant clipping out to me at a reception last night.

Vince Cable asked for a statement on the sale of government assets to ease the national debt, which had been announced that day.

Mr Byrne responded with a few lines outlining what everybody already knew – that the government is thinking of flogging the Tote, the Dartford crossing, the student loan book and the channel tunnel rail link to raise an estimated £16 billion – and then added:

‘We know that councils will make a major contribution to the overall level of asset disposals through sales of housing and other assets.’

According to Mr Shapps, a third party asked housing minister John Healey if he knew what the line meant – to which he replied he didn’t know anything about it.

It seems odd that a government that is embarking on a major review of council housing finance designed to allow local authorities to manage their own housing income, would consider trying to channel it back into central government coffers.

It might also be impossible. After further questioning from Mr Cable, Mr Byrne conceded that of the £16 billion of assets the government was planning on selling, £11 billion are owned by local authorities, who would be ‘free to keep those receipts and reinvest them in priorities such as affordable housing and schools’.

All the same, the government’s banking bailouts have left it with a national debt of £170 billion to manage, and it must be exploring every avenue for ways to raise a few quid. If it were to find a few billion down the back of the social housing sofa, that might come in very handy.

Readers' comments (1)

  • Slight problem with this idea, the same one that is bedvilling reform of Local Authority Housing Finance.

    This is a zero sum game - the housing assets that have some value (ie which could theoretically be sold) are the ones that are producing the inccome needed to support the assets that have a negative value. Sell the positive value stock and the Government will need more money to subsidise the negative value stock. Net result probably no benefit to Government coffers.

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