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The government's drive to transfer council houses out of local authority control has been set back by a vote agains...
The government's drive to transfer council houses out of local authority control has been set back by a vote against transferring the largest stock of any council in Britain.

Just over 33.2% of Birmingham City Council tenants voted in favour of the transfer, but nearly 70% voted against. In total 94,000 tenants were balloted as part of the plans for the transfer of 88,000 council houses - what would have been the biggest housing stock transfer to date.

The Birmingham result comes as a blow to ministers who had forecast two million council homes would be transferred in the 10 years from April 2000.

However, Glasgow City Council tenants voted to transfer 84,000 homes to Glasgow Housing Association - the second biggest transfer - in what is seen as a victory for the council and Scottish Executive.

There have been more than 150 smaller transfers in England, but ministers saw the Birmingham sell-off as a landmark for larger scale transfers.

Planning minister Lord Falconer remained committed to the drive to transfer housing and suggested Birmingham City Council should transfer its stock to an arm's length management organisation.

Arm's length companies are owned by the council, but allow extra borrowing powers if it can prove effective management and investment.

Lord Falconer said: 'It's back to the drawing board for Birmingham. There are alternatives, such as arm's length management organisations, and they depend upon improving management standards and obviously Birmingham will have to look at things like that.

'There is no way of escaping the basic economic fact that a transferee company, such as a housing association, can raise more money than a local authority.'

Unison claimed victory and said 2,200 jobs will be retained in the public sector.

Regional organiser Fiona Westwood added: 'We will seek to hold local government secretary Stephen Byers to his statement that council homes will be brought up to standard by 2010 irrespective of any decision taken by tenants.'

The Glasgow ballot result means the Scottish Executive and UK Treasury will write off Glasgow's housing debt of£900m.

-- The LGC Market report: housing, property & regeneration is a new guide to transfers, housing, private finance and estate management. It is available for£170 (normal price£200) to councils and registered social landlords until 22 April. Contact Sarah Wightman on 020 7874 0347 or e-mail

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