The government is considering using local authority capital receipts from right to buy deals and large-scale voluntary transfers to fund the proposed £8bn housing market renewal fund, Housing Today has learned.
Under the proposals, being considered as part of a review of housing spending by DTLR and Treasury officials, capital receipt funds would be ‘pooled’ and used to fund regeneration, principally in run-down urban areas.

This is certain to enrage those principally rural councils that have completed stock transfers and now operate debt-free, as they are permitted to spend their capital receipt money as they see fit.

Under current Treasury rules, local authorities cannot touch their capital receipt money until they have paid off their existing debts.

Housing minister Lord Falconer (pictured) is understood to back the scheme as it would redistribute some of the billions of pounds held in capital receipts by councils in England and Wales.

Brendan Nevin, head of regeneration at Prime Focus, was cautious about the idea. “There would be winners and losers from the whole process. I just wonder if they could pull it off politically,” he said.

Chartered Institute of Housing policy director John Perry said: “Frankly, it wouldn’t matter where the money came from.

“If this was the device used to fund the market renewal programme, then that would be welcome.”

He added: “The important thing is that money is made available. If one or two areas can be funded from the back-pocket, then that will help to get money for others in the summer’s spending review.”

Meanwhile, the G15 group of large London RSLs has written to Falconer, expressing concern that the stock transfer process in London is stalling.

It said that without public investment in a ‘transfer to transform’ fund to encourage the transfer process, the government’s decent homes target will not be met.

Source

Housing Today