The coalition government has recently (November 21st) produced a consultation document on the new ‘self-financing’ system which is being introduced next April. The document includes the proposed debt that each Council will have to take on, including a one off payment to the government. The estimate earlier in the year of Swindon’s payment to the government was £145.5 million. However, the latest recalculation means that Swindon will have to pay £5,835,000 million less to the government – £139,665,000.
Unfortunately they have also reduced the borrowing cap which the Council will have, from £176.6 million to £173,495,000. However, it does mean that the Council will have an extra £2,393,000 to spend.
Given the fact that they are supposed to inform tenants of the financial position in relation to the two options (transfer or staying with the Council) it will be interesting to see whether they mention this fact in the ‘Stage 2 notice’ informing tenants that a ballot will have to take place.
Whilst this is certainly a small sum it is a material factor in a ballot. For instance this money could be available for spending on sheltered accommodation. The Council has cynically said that there is zero money available to upgrade sheltered accommodation – they think it is a vote winner. (They could have shifted some of the money slated to be spent on ‘non-traditional’ homes to sheltered accommodation.)
So tenants should be informed of this change in the finances, even if “marginal” as Brian Mattack described it at last Tuesday’s Council meeting. Moreover, as Bernie Brannan, Head of Housing has confirmed to me, the Council will be sending in a submission to the government’s consultation document seeking further movement from the government on the level of debt, so the situation might change further.
Martin why do Councils suddenly have to pay for the Council Houses anyway? Surely they were paid for years ago. Is it just another way of the unelected Coalition Govt. stealing money?
Unfortunately Debbie the ‘debt’ which we are being told we will have to pay originates from the last government which proposed the ‘self-financing’ system. The national Housing Revenue Account was actually in surplus – the government wasn’t sharing all the money between Councils, it was keeping hundreds of millions in Whitehall. Arounf £5 billion of the ‘debt’ was actually the money which the government gave to ALMOs (Arms Length Management Organisations). This money was actually simply added onto the national ‘debt’. The irony was that Councils could set up ALMO’s without the tenants having the right to vote!
The coalition government has uprated the ‘debt’ in line with the current inflation level.
In the current economic circumstances this means that Councils will be put under greater pressure.
Instead of ‘quantitative easing’ (handing over money to the financial institutions, it would have made more sense to write off this ‘debt’ That would have meant Councils having more money to carry out work on their homes, build new houses, and put unemployed building workers back to work. We desperately need more Council housing. However, they want to sell off more Council houses via ‘the right to buy’, whilst not providing any money to build new ones. With a 50% reduction on the price Councils will not have enough money to build new homes to replace those flogged off.