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ASSEMBLY SECURES EXTRA HOUSING FUNDS WORTH OVER£300M FROM TREASURY

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All debts remaining with local authorities in Wales after transferring their housing stock to registered social la...
All debts remaining with local authorities in Wales after transferring their housing stock to registered social landlords - potentially more than£300m - will be funded directly by treasury, minister for finance, local government & communities Edwina Hart and secretary for state for Wales Paul Murphy announced today.

The national assembly has reached an agreement with the UK government which will enable all local authorities in Wales to make the decision of whether to transfer their housing stocks to new or existing registered social landlords without fear of incurring any 'overhanging debt' from the transaction.

This would arise when any outstanding debt held by a council for its housing stock would be lower than the transfer valuation of the homes.

Mrs Hart said: 'I am delighted to have secured this arrangement for Wales. Although the full extent of the financial benefit will only be known when councils and their tenants decide that such transfers are the best option to achieve improvements and good value for money, the total residual debt in Wales on present calculations would be well in excess of£300m.

'It is the councils in the most socially-deprived areas of Wales - such as Blaenau Gwent and Rhondda Cynon Taff, where housing stock valuation is particularly low - that could be major recipients of this funding. This, therefore, creates the potential for considerable additional investment in some of Wales's poorest communities.

Mrs Hart added: 'I wish to thank secretary for state for Wales Paul Murphy for his support on this matter. Also, in agreeing to support the national assembly with this funding, chief secretary to the treasury Andrew Smith has acknowledged the importance of this approach in achieving the Assembly's goal to improve the quality of council housing stock across Wales.'

Secretary for state for Wales Paul Murphy said: 'This is an excellent example of the close and effective partnership between Cardiff and London. Working together, Edwina Hart, Andrew Smith and I have been able to secure this agreement for the benefit of Welsh local authorities and their tenants.'

Further discussions are now ongoing between the assembly and the treasury on the detailed arrangements related to the basis of the valuations.

NOTES

- When local authorities transfer their houses to a registered social landlord, the valuation is based on the income that will be obtained from the rents and the costs of carrying out the repairs and improvements.

- In some cases this valuation will be less than the debt owed by the council in respect of the houses. This is the 'residual' or 'overhanging' debt.

- Without this agreement this debt would have to be met by the Assembly either as a one-off payment or by continuing Annual Revenue payments.

- The agreement promotes the assembly's National Housing Strategy, which aims to give the opportunity to all in Wales to live in good quality housing.

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