the Office of the Deputy Prime Minister and the Housing Corporation were forced to defend stock transfer policy at a sitting of the Commons Public Accounts Committee on Monday.
Facing criticism that transfer is too expensive, Mavis McDonald, permanent secretary of the ODPM, admitted that costs would be lower if housing renovation took place under local authority control. "It is always cheaper to borrow money through the public sector," she said.

The influential committee's questions were prompted by last month's National Audit Office report, which estimated that the next five years of stock transfer would cost the taxpayer £1.3bn more than equivalent renovation under council ownership (HT 21 March, page 8).

The ODPM has since made it clear that it considers the extra expense to be justified by additional benefits to tenants, such as earlier renovation and increased tenant participation.

Dr Norman Perry, chief executive of the Housing Corporation, told the committee that the £1.3bn figure was hypothetical. "We don't know if local authorities could do the work to the same standard, and as cheaply, as housing associations," he said.

Perry added that one of the main benefits of transfer was the different style of housing management offered by associations. He said the switch to an association was a change from a "no" to "yes" culture.

But Edward Leigh, chairman of the Public Accounts Committee and Conservative MP, said the aim of transfer was to prevent spending from appearing on the public balance sheet. "To do that, the government has argued that the policy is cost-neutral, when it isn't," he said.

Source

Housing Today