local housing company (LHC) will give tenants a greater role in
running their own estates, housing minister Nick Raynsford said
following a vote by tenants to transfer under the government's
Estates Renewal Challenge Fund programme, under which a grant of over
£43m was awarded towards the refurbishment of these estates.
Mr Raynsford said that, with LHCs now an established part of the
social housing sector, many thousand's of ex-council tenants are
reaping the benefits available to them in the running and management
of their homes.
'This transfer will allow repair work to go ahead more quickly as SLH
is not limited by local authority borrowing restrictions and so they
have access to additional financial resources. Tenants will also
benefit annual rent rises guaranteed at no more than the rate of
inflation plus 1% for the next five years. Even after this period,
the new landlord's financial plans should enable them to keep rents
at around this level for the foreseeable future'.
The application from Liverpool City Council to transfer its stock
came after a ballot in which 78% of tenants voted, of whom 85%
supported the transfer. South Liverpool Housing are receiving a grant
under the government's Estates Renewal Challenge Fund initiative of
more than£43m, in addition to a loan of£38m from
private funders. This means that more than£81m is being made
available for the refurbishment and upkeep of tenant's homes.
Today's announcement brings the number of approved large scale
voluntary transfers of local authority housing stock to 95, involving
more than 360,000 homes. These transfers have raised over£6bn
in private finance to purchase and invest in the housing stock.
Provision to set up Local Housing Companies (LHCs) appears under the
Housing Act 1996. LHCs allow greater local authority and tenant
participation than other Registered Social Landlords such as housing
associations, and they are not limited by the same borrowing
restrictions imposed on local authorities.
Estates Renewal Challenge Fund (ERCF)
ERCF was launched in November 1995 with the aim of regenerating some
of the remaining big, run-down local authority estates by
facilitating their transfer to registered social landlords, enabling
private finance to be raised to help meet some of the costs.£511m is
being spent by 25 local authorities on 40 transfer schemes involving
over 44,000 homes.
The third round of ERCF funding was announced in February 1998 and
funding will finish on completion of the third round transfers.
However, private finance remains an important element in maximising
investment in local authority housing. Where transfer remains a
favoured option, councils and local tenants may seek to pursue the
transfer as part of a 'New Deal for Communities' scheme or from the
authority's main housing investment programme.
When a local authority proposes to transfer an estate under the ERCF,
it has to consult and ballot its tenants. Before giving consent to
any transfer, the secretary of state must be satisfied that the
majority of tenants are not opposed to the transfer. This will remain
the case for transfers subsequent to ERCF.