Swindon TUC calls on Council to suspend move to transfer Council Housing in the light of government consultation on new Housing Finance system

Swindon TUC Press Release July 8th 2009

Swindon TUC calls on Council to suspend move to transfer Council Housing in the light of government consultation on new Housing Finance system

Housing Minister John Healey has announced that the government is bringing forward proposals to “dismantle the Housing Revenue Account Subsidy system” replacing it with “a devolved system of responsibility and funding”. The details of the proposals will be published before the summer Parliamentary recess.

This has big implications for the current ‘options appraisal’ process taking place in Swindon. The Council was due to vote on a proposal to ballot tenants on transferring our Council Housing to a Housing Association, at its meeting on July 16th.

However, the financial projections on which this proposal was based are now out of date. The government’s new ‘self-financing’ system accepts the principle that all Councils can keep all the rent they raise from their tenants. This means that Swindon will receive at least an additional £9 million a year which is currently taken off of us by the government – the so-called “negative subsidy”.

The Council was assuming that the government Review of the Housing Revenue Account, which has recently taken place, would not offer much to Swindon.

Whilst there are a number of questions about how the government’s new system will operate, it would be irresponsible to proceed with the Council’s proposal, since they will have to set up a ‘Shadow Board’ for what would later become a new Housing Association, provided tenants voted in favour of transfer.

Given the fact that the proposals will be available in a few weeks, Swindon TUC is calling on the Council’s ruling group to suspend their transfer proposals so that the implications of the change in the government’s Housing system can be examined in detail when they become available.

Swindon Trades Union Council secretary Martin Wicks said:

Whilst we have yet to see the detail of the government’s proposals, what we do know is that they have accepted the principle that Councils can keep all the rental income they receive from tenants. This alone is sufficient reason to suspend the move towards a Housing Association. The financial calculations over 30 years, on which this proposal was based, obviously did not include the extra millions we will receive as a result of the end of the “negative subsidy”.

Dvaid Renard did say that they would have to ‘go back over the figures’ if the outcome of the government’s Review included significant changes. Allowing us to keep all our rent is a significant change.”

Swindon TUC, together with the Defend Council Housing campaign is calling a lobby of the Council meeting on July 16th (assembling at 6.15 p.m. At the Civic Offices in Euclid St) to press the Council to suspend the process in order to assess the implications of the government’s proposals.

For further comment ring Martin Wicks on 07786 394593

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