The clamour for transfers

Changes are afoot in the world of council housing transfers. The time, not too long ago, when "leafy shire" Conservative councils distinctly stood apart from their Labour opposite numbers in their support for LSVT is well and truly gone.

Whereas in previous years LSVT was dominated by councils with high value stock often in rural or suburban localities, this year has seen a surge of urban councils with lower value stock keen to show their New Labour credentials.

As many as 25 councils, including 13 Labour-led authorities, are vying to get an unprecedented 150,000 units on to the disposals list for 1999/2000. The list includes a staunchly Labour council in Burnley, Lancashire, which has submitted a bid to transfer its entire 5,600 stock to a local housing company. Saville, Burnley's director of housing and community services, says participation in LSVT "most certainly did not come naturally" to the council, but there was no alternative.

"The lack of investment in housing stock through traditional sources of funding means that stock condition is pretty bad. Some areas have had no significant investment for 10 or 15 years," he says. "A few years ago we were spending £1.5m pounds annually on plan maintenance.

Now we're spending only £82,000 which is not enough to give a coat of paint to a fraction of our properties."

But the willingness to participate is one thing - actually getting on to the disposals list could be quite another, considering the amount of competition for a place.

Peter Chapman, senior director of consultancy Chapman Hendy, points out that Labour support for transfer now extends to the very top, coming as it now does with housing minister Hilary Armstrong's personal seal of approval.

"Since it is the Hilary Armstrong policy that local authorities should consider their most long-term strategy and if a couple of dozen councils have done that, I'm sure DETR will wish to maximise the number of authorities that will go on the disposals programme," he says.

But many of the urban or metropolitan councils will be bringing substantial debt with them. Although the 20 per cent transfer levy on positive value stock was reintroduced last summer to subsidise poorer councils, will there be enough readies to go around?

"That's difficult to answer," says Chapman. "This is one of the things that DETR and the Treasury will have to weigh up, but this government will probably wish to give as much priority as possible to some of the inner city transfer proposals."

However, he warns: "There's no doubt that the more there are of those councils, the greater the overhanging debt, then the greater the problem that presents."

National Housing Federation finance director Stephen Duckworth is upbeat about the prospects for LSVT. He says the imminent removal of the so-called "tenants' tax" - the annual £1.2 billion of council rent which is recycled into housing benefit - could lead to a significant expansion of transfer.

He explains: "If there is a billion pounds at the moment transferring from local authorities to the Department of Social Security every year to pay for housing benefit, every time a transfer takes place several hundred thousands pounds is lost because the stock no longer belongs to the local authority but the DETR is still liable for the payment."

Problems caused by this haemorrhaging of DETR resources acts as an "artificial barrier" to transfer as far as the department is concerned, which, according to Duckworth, could be removed with permanent interdepartmental settlement.

Whatever the future holds for LSVT as a whole, Burnley's Ian Saville is now convinced that transfer will make a real difference to his tenants which will entail a £200m, 30-year improvement programme bringing central heating, energy efficiency and modernisation to where it is needed.

"Initially we were fairly reluctant but as we have gone through the process, more and more people have come round to the idea. It gives both tenants and staff a ray of hope which at the moment they don't have," he says.