Lib Dem leader urges council to reconsider stock sell-off amid HRA reform

Published by Ross Macmillan for 24dash.com in Housing

Plans that would see more than 6,000 council houses in the Wycombe district be sold to a housing association appear to have lost cross-party support.

The move was borne out of the complexities of the existing Housing Revenue Account subsidy system which means councils have to pay back nearly 50% of their rent receipts to Central Government.

However, the move to sell off its housing stock to a housing association – where the organisation would get to keep all the rent and spend it on improving homes - has lost cross-party support since housing minister Grant Shapps announced the scrapping of the subsidy system. Under the housing minister’s proposals, councils would get to keep their rent receipts, but would, as part of the proposal, have to take on a slice of the national housing debt. Taking its stock into account, the council estimates that it would have to take on around £180m.

Steve Guy, Liberal Democrat group leader for Wycombe District Council said it was now “irresponsible to press ahead with stock transfer” until the council had evaluated the reform package.

However the council has rejected the self-financing system in favour of pursuing stock transfer.

In a statement the council said: "The new system would mean that in return for keeping every £1 it gets in rent, Wycombe District Council would take on part of the national housing debt. This would see the council taking on a debt of £180m when it currently has no housing related debts.

"The proposed new system does not provide the ability to invest in the stock that tenants and leaseholders want nor does it allow the Red Kite Standard to be achieved. This is why the council rejected the new system.

"Wycombe District Council is in a unique position; it is the only local authority in England consulting on a complete stock transfer, following special funding from the previous government to look at the options for the future of our housing.

"The new coalition government has confirmed to the council that it wishes to continue to work with us on our tenant-led transfer proposal. At this stage in the development of the new government's housing policies, it has asked for further information from, and discussions with, the council. This announcement does not alter this.

"This will inevitably take a little time and as soon as these discussions are completed we will issue the Stage One Housing Transfer Offer as soon as possible. The council, shadow board of Red Kite Community Housing and the Tenant and Leaseholder Committee remain fully committed to the tenant-led transfer."

Wycombe Defend Council Housing (WDCH) campaigners believe that stock transfer is privatisation, and that it would "expose" tenants to market risk, and would weaken security of tenure.

It believes the stock transfer plans should be "put on hold" while the council re-examines the financial case, lobbying government if necessary for adequate allowances under the proposed self-financing system.