Both councils, like a number of other inner city authorities which have yet to transfer, have housing stocks that are worth less than the debt on their Housing Revenue Account.
The Department of the Environment Transport and the Regions has promised to set out how it intends to deal with the problem - but its plans have been stalled by the Treasury.
A consultation is expected in the next few weeks, but a final decision may not be made until late this year, which could be too late for Burnley and Coventry.
The delay could force the transfers to be postponed until next year. Burnley has already been asked to submit another bid for next year as a contingency. despite winning a 90 per cent yes vote in favour of transfer.
According to transfer experts, some councils may also shy away from submitting bids for next year's programme because of the uncertainty.
It is understood that when it finally does appear the consultation paper will set out at least three options for tackling the problem. The first, which is favoured by ministers, is to pay the councils or the Public Works Loans Board a one off grant. The second is to service the debt in the council's general fund and the third is to switch the debt to the new landlords.
Burnley director of community services Ian Saville said: "The delay is causing us real difficulties."
He explained that the council may be forced to prepare a housing budget for the following year.
"If they don't resolve it is going to jeopardise the size and momentum of future transfers." Transfer specialist Chapman Hendy Associates director Richard Beal said: "If the situation is not resolved until the end of the year it would be very difficult for those transfers to complete this financial year."
He also urged the government to find a solution quickly to "keep next year's programme on track".
Source
Housing Today
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