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HOUSING - WALES DEMANDS TO KEEP STOCK

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Assembly wants councils to retain control of housing stock. ...
Assembly wants councils to retain control of housing stock.
By Jon Hanlon, Scotland and Wales correspondent.
The Welsh Assembly is calling for a reform of the local government finance system to allow councils to retain control of their housing stock.
The government has issued guidelines encouraging councils to transfer their housing stock to ensure all accommodation is of a 'decent standard' by 2004.
Any new finance system could be introduced in three years' time, removing many of the controls on local government capital finance and allowing councils to operate much like a housing association. But Gwenda Thomas (Lab), chair of the Assembly's local government and housing committee, does not think this goes far enough.
'We can't be sure this will be introduced, even in three years' time. There are some authorities that know they have to do something pretty quickly,'
she said.
In some areas of Wales, housing is in such a poor condition that under existing rules the only option is to take stock control away from the council and transfer it to a housing association with the powers to raise the necessary funds.
Ms Thomas said: 'We have come to the conclusion the most straightforward option would be a change in the local government finance system to allow local authorities to borrow on the same terms as housing associations.'
The Welsh Local Government Association lent its weight to the argument, saying the existing restrictions on councils are 'indefensible'.
Ronnie Hughes (Lab) said: 'It is indefensible that Welsh councils continue to be prevented from making the investment required to bring thousands of council homes up to a modern standard by the restrictions on borrowing imposed by central government.' But the Local Government Association is concerned that if councils are given the same borrowing freedoms as the private sector there is a risk of bankruptcy.
Financial mismanagement could lead to central government being forced to bail out councils and there are no indications this would happen.
LGA policy officer Trevor Wenman said: 'It's all very well to have the freedom to raise the cash, but councils need to ensure they have the wherewithal to pay the interest. There's a huge national backlog of housing repairs and modernisation, all of which is going to cost money, but there's no simple answer.'
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