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'ROBIN HOOD' TACTICS FAVOURED BY THE CHARTERED INSTITUTE OF HOUSING

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Local authorities made 'rich' from the transfer of attractive and saleable council homes should continue to be levi...
Local authorities made 'rich' from the transfer of attractive and saleable council homes should continue to be levied so as to make transfer a realistic option for poor quality homes, say housing's professional body, the Chartered Institute of Housing (CIH).

Debts could be paid off and part of the money generated by the sale of houses would remain in housing to improve stock conditions across the country.

CIH make this call in their response to Department of the Environment, Transport and the Regions (DETR) consultation, Housing Transfer in England - Dealing with Overhanging Debt and Altering the LSVT Levy (responses due 8 October).

Under existing housing transfer programme rules a 'significant number' of local authorities would, currently, fail to get transfer approval because they would be unable to raise enough money from the sale of their stock to meet the debts associated with it.

To date, the DETR has not approved housing transfer where the capital receipt from the sale of the entire stock is less than the housing revenue account (HRA) debt.

Money had previously been available to help partial transfer in certain circumstances through the estates renewal challenge fund but even that is now unavailable following its recent demise.

From the options for dealing with debt put forward by the DETR, the CIH would prefer to see a one-off grant paid to local authorities which would clear the debt.

In addition, CIH would not rule out the possibility of small debts being transferred to the Registered Social Landlords (RSLs) involved. Although this would land RSLs with debt at the time when they take on additional housing stock, according to CIH it will in some cases be a viable option if the RSL has sufficient capacity to do it.

A further option suggested by CIH and not covered in the DETR paper is to transfer the debt to central government - which might avoid heavy costs to the housing investment programme.

Whatever debt redemption option is chosen there still remains the question of finding resources to pay for it. For this reason, CIH support this government's reintroduction of the large scale voluntary transfer (LSVT) levy. They want to see it used explicitly for dealing with the transfer of poorer quality stock. In order to fulfil this function, CIH want to see the levy take the more progressive form suggested in one of the DETR's options.

CIH director of policy, John Perry, said: 'The aim of transfer is to improve the condition of housing stock. Measures in this paper will help to ensure that transfer is directed at poorer quality stock, and we urge the Government to introduce them as quickly as possible.'

CIH hope legislative measures needed to put in place both debt redemption and the progressive levy will be included in the forthcoming green paper.

Notes

The progressive levy

17m

40+7.5m30%

30 - 402.754.5m27.5%

20 - 302.5m0.25m25%

10 - 202.25m2.25m1.8m22.5%

0 - 102m2m1.8m20%

Leviable Receipt

(£m)

(Capital Receipt Debt)Authority A

(Leviable Receipt£65m)Authority B

(Leviable Receipt£21m)Authority C

(Leviable Receipt£9m)Levy Rate

Estates renewal challenge fund (ERCF)

The third and final round of ERCF funding was announced in February 1998. Nine of the 25 local authorities undertaking transfer in the 1999 programme (announced 11 March) are being facilitated through the ERCF.

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