Wednesday, 19 May 2010

An end to council tenants subsidising national government?

One of the main items on today's Cabinet agenda - although tucked away at the end - was a paper on a proposal for Cornwall Council to buy itself out of the current landlord services deal with central government.

At the moment, central government top slices all council house rents. This is money paid by Cornwall residents which goes to central government. It doesn't come back to the Council and so cannot be used to improve the council housing stock or to build new homes.

The idea being proposed is that the Council takes out a large loan, effectively a mortgage, which will buy our way out of the deal. It will give the Council far more control over our properties and the money that tenants pay.

There are risks of course. The loan will be subject to interest rate variations (although a favourable deal is on offer); the value of the rents coming in (which are set by the government) could fall and the repairs needed might outstrip the amount in the bank. But overall this looks like a good deal which is worth pursuing.

The loan would free up money to be spent on repairs which is good and will be welcome news to those tenants who have been told that their repairs are non urgent and therefore some way down the track. I asked, and received assurances, that some of this money would also be used for communal areas and facilities, not just the properties themselves.

And finally, the money could also build up to 150 new council houses.

Of course, with a change of Government, this deal is subject to change. But I very much hope that the new coalition government will consider that devolving more control over council housing back to local councils is a good thing.

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