A question of balance

Yet plans of this size now pale in comparison to those of Sunderland (40,000), Birmingham (90,000) and Glasgow (100,000).

And with housing experts predicting that housing associations will eclipse councils as the main provider of social housing within seven years, it is not only size of individual transfers or the annual programme that is important - the nature of transfer itself is changing.

Not too long ago, large scale voluntary transfer (LSVT) was seen as the preserve of "leafy shires", mostly Tory controlled councils. To them LSVT was a dream. They could offload their debt, raise money to improve services and gain brownie points for fulfilling the Thatcherite dream of "rolling back the frontiers of the state".

This contrasted sharply with debt-laden Labour counterparts in urban areas with low or negative value stock.

These councils were either fobbed off with LSVT's poor relation, the dowry-funded Esates Renewal Challenge Fund, or were opposed to transfer on principle.

But then in came Tony Blair, new Labour, and the 1997 election landslide. Out went clause four, nationalisation ... and, it seems, council housing.

Two years on the government is bending over backwards to make transfer attractive to cash-strapped urban councils and suspicious Old Labour tenants alike.

And with the 2000/01 round looming on the horizon, new ideas are coming thick and fast.

Last month news came of proposals to introduce a "progressive" structure on the transfer levy which would see richer councils helping the poor (Housing Today, issue 147).

Only councils with a positive value stock pay the transfer but some councils' stock is worth more than others.

Under the plan, councils with higher stock value would pay a higher rate of up to 30 per cent but those that would get a small receipt could pay less than 20 per cent - easing the burden on the poorest councils.

This was quickly followed by moves to tackle the massive problem of overhanging debt - the amount councils owe on their housing revenue accounts on loans from large council housebuilding programmes, minus the value of their stock today.

The options outlined to deal with overhanging debt comprised paying a subsidy to continue servicing the debt or provide a one-off grant to councils to pay it off.

These plans came hot on the heels of moves to further ease the financial problems facing cash-strapped councils.

Last month's consultation on administering LSVT looks at ways to end the much criticised "back-ended" annualised programme under which councils have to finish the entire transfer process within one year (Housing Today, issue 146).

The government argued that lenders could take an unfair adavantage of the scramble for funding to meet the deadline by charging higher interest rates. And then, finally, all was revealed.

The upshot of last week's guidance on the 2000/01 programme was that not only would competition between RSLs and local housing companies be allowed, councils were being positively encouraged to pursue it.

"Local authorities should consider holding a competition and invite existing RSLs to bid for the stock as well as setting up a new council sponsored landlord," it says.

The guidance suggested that competition could come in the form of price. In other words, although the formula to determine the price of transfer would remain, there would be nothing to stop an RSL bidding above it to clinch the deal - thereby boosting the council's capital receipt.

Competition could also come in the form of better service delivery or improved terms of transfer. But the major innovation in the document was the degree of tenant involvement. No longer would tenants sit idly by while the council and its local housing company decide their fate.

"The department expects tenants to be involved in the process from the outset. Local authorities will be expected so show how the tenants were involved," says the guidance.

Neither would this involvement be limited to the option appraisal stage - even though tenants will play a key role here as well.

In conjunction with the initiative allowing housing associations to bid for whole stock transfers, the government expects tenants to be in there making key in deciding between competing RSLs.

And it doesn't stop there. Once the ballot - or even two ballots - have been won, tenants could end up in the majority of the new board, according to another initiative.

"Ministers have decided that in certain circumstances it would be appropriate for a resident controlled RSL to take on all the stock in a local authority area where there is demand from this from tenant," it says.

There was then, something for everyone. Councils would rid themselves of a mountain of unwanted debt. Tenants, often traditional Labour supporters and suspicious of transfer would have a much greater role. And aspiring housing associations would get a chance to prove themselves as Best Value service providers.

So with an avalanche of transfers on the horizon, everything in the garden appears to be rosy.

But is it?

If you scratch the surface of this apparent unstoppable forward movement there more than a few problems.

Firstly there are the lenders. They are becoming increasingly nervous about funding ever-larger transfers of low value urban stock which has questionable long run demand.

Last week housing associations admitted that competition for stock could mean them taking greater risks in their efforts to to outbid each other and appear attractive to a council.

And in Scotland, a recent survey the Scottish Nationalist Party claimed that 76 per cent of councils were opposed to transfer, with just seven per cent in favour (Housing Today, issue 147).

Unions of course do not like it either. In July, a joint meeting on the effects of transfer organised by the north west Trades Union Congress barracked chair of the all party group on homelessness and housing need Andrew Love MP, when he tried to defend the governments record (Housing Today, issue 143).

But most important are the views of tenants. Although this year's programme is very much on track in terms of ballots - so far - there has been a growing number of high-profile failures.

It began in March when 9,000 tenants in Cambridge turned down their offer, then another 2,000 tenants in Tower Hamlets followed suit in a vote over Poplar HARCA.

This was followed early last month another failure - 4,500 tenants in Fenland (again in Cambridgeshire) decided by a two-to-one margin to dump plans for Fenland County Housing.

To cap it all a ballot of 7,000 tenants in Lewisham south east London went down to defeat just five weeks ago.

A total of 23,000 failed transfers is no small number of tenants - especially when it is considered how small the anti-transfer groups are. Defend Council Housing's national "gathering" this summer attracted about 150 people.

And although pro-transfer zealots may retort that the campaigners are loony lefties armed with libellous propaganda, it may just also be true that large numbers of traditional Labour-voting council tenants basically do not like transfer.

Many resent the compromises on tenancies, rent, and public servcies required to secure the desparately-needed investment.

It is a question of balance. On the one hand the new roles outlined for tenants will have to be strong enough to overcome growing opposition to transfer. On the other hand, they will have to keep on side lenders nervous of those same powers and the possibility of increased risk.

But if next year's round is as large as many people predict, and if the problem of overhanging debt is resolved, it is likely that for the first time LSVT will comprise mostly large low value urban transfers rather than leafy shire stocks.

For the time being, however, all eyes are on the remaining ballots of this year's round, especially the biggies - Coventry and Tameside.

The result of these two crucial ballots - and the first, Tameside, is due within the month - could determine which way many other councils, tenants, and lenders jump.

At the moment the council housing is perching on the edge of a major change but like the Roman god Janus it is looking both ways at the same time.