Eight councils are working up detailed plans that would allow them to borrow private cash without transferring stock, amid signs that the government is softening its stance on the issue
The Local Government Association has revealed that despite the government's hard line on borrowing rule changes, it is now hopeful that a way can be found for councils to raise private cash.

Eight councils have been testing the idea of using future rental stream as security for new arms-length, but council-owned housing companies.

The LGA has recently had discussions with officials on the matter. It says the idea is being encouraged and is seeking a meeting with housing minister Nick Raynsford to take it further. LGA housing chair Paul Jenks said: "This is an idea that has received a lot of work. We are not saying that is the only option, or that it should replace transfer, we are saying that you can achieve it if an authority wishes to retain its stock." He also insisted that lenders are backing the plan.

Impetus for the scheme has been boosted by the change of housing minister. Raynsford last month said he wants "people to continue to look in an innovative way at what can be achieved by different models of management and ownership." (Housing Today, 23 September). DETR is also known to be concerned about the long term cost of stock transfer.

Jenks said the LGA were not ready to name the eight authorities but he confirmed that they included some of the six authorities that were being lined up to pilot the idea of so-called quasi-corporations. Those were Derby, Wakefield, Leeds, Salford, Sandwell and Southampton - Jenks own council. Jenks said the idea was not "massively different" from quasi-corporations.

LGA head of housing group Paul Lautman said: "It has always remained our view that there should be alternative models of investment for council housing based on their assets and revenue streams and we have been continuing to press and discuss this with government."

Source

Housing Today