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The government will help councils with housing debt, as part of the transfer of council houses to community ownersh...
The government will help councils with housing debt, as part of the transfer of council houses to community ownership. Scottish housing minister Calum MacDonald has outlined the steps to be taken by councils and the government to ensure that the new housing partnerships initiative radically transforms Scotland's housing landscape.

In a letter to Frank McAveety, leader of Glasgow City Council, Mr MacDonald emphasised that the selection of bids under the government's new housing partnerships initiative will be a competitive process. After welcoming the city council's willingness to think radically about how best to address its housing problems, the minister wrote:

'If Glasgow is seeking government help with its debt, the onus is on the city council to put forward the best possible case - one which deserves support in itself and compares favourably with the many other proposals which we shall no doubt be receiving from other councils.

'I cannot stress too strongly the importance I attach to the community empowerment aspects of transfer proposals. It is important that councils work in partnership with others, including housing associations, so that community regeneration is lasting and new jobs are created.'

Where stock transfer proposals are affordable, represent good value for money and are selected to proceed, the minister confirmed that the government would be prepared to provide funding initiative to tackle the outstanding debt problem.


1.The next phase of new housing partnerships was announced on 24 August when it was confirmed that, following the government's comprehensive spending review, an additional£278m was being made available over the three years from 1999-2002. Councils were advised that the government intended to give priority to funding well founded proposals for housing transfer which promote community empowerment and bring in private finance. Councils have were invited to submit bids for funding under this next phase by 15 December 1998.

2.A number of councils are considering housing transfers. At the end of October, Glasgow City Council was awarded new housing partnership funding of£1.065m to undertake a feasibility study into

transfer. This will allow the council, tenants, funders and the wider housing community to reach a view on the best way forward for housing in Glasgow.

3.Councils considering transfer could submit provisional resource bids until the deadline of 15 December 1998. The advisory group established by the government to assess bids (chaired by The Scottish Office and including representatives from COSLA, Scottish Homes, the Chartered Institute of Housing in Scotland and the Scottish Federation of Housing Associations) could then recommend that resources should be earmarked for councils in this position, until fuller information is available from them.

4.Detailed arrangements to deal with debt would need to be agreed in individual cases and be affordable. In general, however, where a council's housing debt exceeded the receipt from disposal of its stock:

- the government would expect the council to obtain the best possible receipt

- the whole of that receipt would be used to repay part of the council's outstanding housing debt

- the cost of the premature repayment of debt (ie the breakage costs) would be met be the Scottish Office from resources provided

- the cost of servicing the remaining (ie residual) debt would also be met by the Scottish Office from resources provided

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