The money that a Council receives from its tenants and from the government is ‘ring-fenced’. It has to be used on housing. What happens when a Council sells its stock? According to the document that the Council sent to the government (appealing for the right to ballot its tenants)
“A transfer could also potentially provide about £41.8 million of capital resources, which Swindon Borough Council could use for various affordable housing, regeneration or community projects in the area and to underwrite guarantees given to the new landlord.”
So money received for selling our homes could be used for “regeneration or community projects” rather than all being used for housing.
Mind you even if the Council committed to spending all the money on housing it’s a promise which apparently doesn’t have to be kept.
In 2005 North Somerset Council promised “to channel money from a stock transfer into projects to meet housing need”. When tenants voted in favour of transfer the Council estimated that it would make £8 million from the sell-off, but when the transfer went ahead it made £22 million.
In June of 2007 when a new Tory administration took over it decided to rescind the previous Council resolution to spend all the money on housing, by limiting the amount to £8 million. When it rescinded the pledge, the council argued that it was too restrictive. It wanted most of the money to be used for improving other services, such as roads.
It added that any ‘legitimate expectation’ of the council spending all the proceeds on housing was ‘over-ridden by the broader public interest of other residents’.
So beware the promises in the ‘Offer document’ that the Council will put to tenants. A promise is a promise but…