Walsall transfer saga ends after Communities Plan stumps up £6m

The transfer of 24,500 homes – the second scheme to get financial help from the Communities Plan – had been dogged by wrangles over funding and staff retention (HT 14 November 2002, page 9). These have all now been ironed out.

The £6m will pay all the early repayment premium on Walsall's loans with the Public Works Loans Board, which would not have been covered by the capital receipt from the sale of the stock.

David Sear, the council's project manager for the transfer, said: "It was a fundamental part of being able to conclude the deal."

He said the problems around early repayment premiums had surfaced late in the transfer process and the government had agreed to "pick up the bill" only last week.

As part of the Communities Plan, the Office of the Deputy Prime Minister pledged to consider assisting councils that are transferring their stock.

It said this would apply when an authority's debt was caused by external factors, such as the changes in interest rates. This has affected Walsall and also Bradford council, which received £5.6m last month.

An ODPM spokeswoman said stock transfers set for early next year in Middlesborough, Worcester and Hartlepool would receive similar help.

As Housing Today went to press, Walsall was due to transfer more than 1800 homes to Watmos, a group of tenant management organisations, and about 23,000 to Walsall Housing Group on Thursday.

Walsall Housing Group paid £24m for its stock, which included set-up costs and a dowry of £5.5m paid to Watmos to take on negative-value high-rise stock.

Walsall's transfer hit trouble when Walsall Housing Group found the council's asking price too high. The error was caused by higher than expected right-to-buy sales, meaning the association would have less stock and a lower rental income than the council had estimated.