Last month's transfer no vote left Wrexham with a £247m bill to bring its homes up to the Welsh housing quality standard. Chloe Stothart reports on the council's next move and how the national anti-transfer campaign will affect other local authorities
Wrexham tenants' no vote last month was a watershed in the history of Welsh housing – its equivalent of the Birmingham debacle. It would have been only the country's second full stock transfer and the damage done to the fledgling process will be felt in councils across Wales.

On the face of it, Wrexham doesn't really have anywhere else to turn. Unlike its English counterpart, the Welsh assembly does not offer extra money for the private finance initiative or arm's-length management.

Fifty-eight per cent of Wrexham tenants voted against transfer, on a turnout of 69%. Not a landslide, but it leaves the council with a £247m bill to bring its homes up to the Welsh housing quality standard by 2012 and no way of paying for it. It is not alone. Welsh councils need £3bn to meet the standard yet the country's capital budget for council housing is just £211m a year.

Like Camden in London, Wrexham played the hand dealt to it by politicians and lost. Now it has to move on. Its first step has been to seek concessions from the Welsh assembly after announcing radical changes to balance the books in the next six months.

Rents will go up 3% on top of the 5.1% rise already agreed for the year. The increase will take its rents over the assembly's benchmark rate – a sad decision for a council that prided itself on having the lowest rents in Wales. Twenty-five temporary staff will leave and their posts will be frozen until October. A total of £100,000 will be lopped from the estates initiative funds, and the repairs budget will be cut by £300,000. These moves should raise about £800,000 this year but £470,000 of that will go back to the assembly to repay debt.

As these measures will not solve the council's long-term funding problems, it has written to housing minister Edwina Hart to ask for a meeting.

Chief housing officer Paul Calland says the council will present a shopping list of options to the minister but also wants to hear what she suggests. The council will ask whether it can have a similar deal to the one that was on offer to the transfer association Tai Wrecsam. If the transfer had gone ahead, the assembly would have written off the council's £47m debt – so it would not have to spend more than £7m of its rental income on repayments every year. Such a change would leave the council about £10m better off a year, making prudential borrowing a more realistic option.

"We could borrow through prudential borrowing, although we cannot get as much as we could do under transfer," says Calland. If the council is feeling bold, it could also ask the assembly to raise its major repairs allowance or give extra funding to ALMOs.

Calland is not convinced these wishes will be granted. "Nice idea, but will the Treasury let Wales have major repairs allowance four times higher than England? I don't think so."

In the past, assembly officials have ruled out giving extra funds to ALMOs. Wales only has 22 councils and it would be hard to shuffle money around without slicing any from the local authorities in greatest need.

Despite the £3bn housing quality bill, only two other Welsh councils have unveiled plans to ballot for a transfer: Swansea and Denbighshire. In the wake of the Wrexham vote, nervous politicians are likely to hold off from announcing their preferred options until after the local elections in June.

There is the view that we should have been more robust in dealing with the campaign run through the newspapers, but that presumes that ‘yes’ was the right answer

Paul Calland, chief housing officer, Wrexham Council

In Wrexham, the transfer had a rather unusual combination of enemies. The local paper, the Wrexham Leader, fiercely opposed it. The council and the Welsh Federation of Housing Associations both wrote to the paper to correct reports they saw as misleading. The local anti-transfer group, Wrexham Against Stock Transfer (Waste), was backed by Defend Council Housing and the local assembly member, John Marek. He referred to transfer as privatisation and compared the Wrexham deal to the sale of the railways.

Calland says there is little the council could have done differently to counter the bad publicity. "There is the view that we should have been more robust in dealing with the campaign run through the papers and did not get our message across, but that presumes 'yes' was the right answer. If you look at our literature, it's clear what the choice was and tenants made their choice."

A national anti-transfer group, Wales Against Stock Transfer, was launched in the wake of the Wrexham vote. Marek has also set up a political party, Forward Wales, which is opposed to stock transfer and is backed by former Welsh secretary Ron Davies.

Meanwhile, just over the border, Chester and District Housing Trust went into Housing Corporation supervision in February after concerns about its governance and finances – adding fuel to the anti-transfer fire.

Denbighshire, the council next to Wrexham, is likely to ballot tenants in the autumn. It needs £53m to reach the housing quality standard and head of housing Paul Quirk says: "We did ask tenants in a questionnaire whether Wrexham had an impact but only a small group said yes. If the assembly changed the rules and offered more money, it would have a big impact."

What are they doing about it?
The housing minister has ruled out giving more money to Wrexham. But the assembly already has plans to ease transfer elsewhere in Wales. The proposals, outlined in a review of national housing strategy by an advisory group, were published a month before the Wrexham ballot but given new importance in the light of the no vote.

The main measures include introducing a "right to know" so all tenants are told by the end of this year what their council needs to do to hit the housing quality standard. There would also be a common methodology for consulting tenants and perhaps a roadshow or video to help them. The review also proposed research to publicise the economic benefits of transfer. Although the proposals are intended to keep tenants informed of the state of their homes, they could also counter misinformation about transfers.

John Bader, director of the social justice and regeneration department at the assembly, says: "It's about ensuring tenants can make an informed decision on whether to transfer or not, which is based on accurate information and a clear understanding of the implications of their decision. In some quarters, there's still the belief that there's a plan B but the reality is very clear. It is not an option for the assembly to shift that amount of public money into housing and from other kinds of services."

Although the proposals have been backed by most of the Welsh housing world, critics say the assembly could do more. A body to nurse councils and tenants through the transfer process is needed, says Keith Edwards, director of the Chartered Institute of Housing Cymru. "We want the capacity to take local authorities and tenants through the process of what they need to do to achieve a decent standard of housing. Some sort of freestanding resource like the community housing taskforce that could work with local authorities and tenants to work out how to achieve its business plans."

How the assembly can boost transfer

  • Introduce a ‘right to know’ so all tenants are told by the end of the year how their council plans to meet the housing quality standard
  • Launch a common consultation methodology for landlords
  • Publicise the economic benefits of transfer
  • Set up a body similar to the ODPM’s community housing taskforce to help authorities and tenants through the transfer process
  • What Wrexham will do next

  • Raise rents 3%
  • 25 temporary staff will leave, and their posts will be frozen until October
  • Cut estates initiatives budget by £100,000
  • Cut repairs budget by £300,000
  • Seek a meeting with housing minister Edwina Hart to find a long-term solution