The government has moved to strengthen the process of stock transfer after the release this week of a controversial and long-overdue report by the National Audit Office.
Whitehall's overall aim is understood to be to arm councils with evidence of the benefits of stock transfer to present to tenants wary of the process.

The moves have also been prompted by the NAO's finding that the next five years of the government's stock transfer programme will cost the taxpayer £1.3bn more than renovation under local authority ownership.

It is understood that meetings took place last week at the Office of the Deputy Prime Minister to explore ways of making it cheaper for prospective transfer RSLs to borrow money.

It is also understood that the ODPM has continued developing a structure for monitoring the value for money offered by individual stock transfers and to check that promises made by transfer RSLs are kept.

The strengthened structure could be in place as early as this autumn and may be used to evaluate transfers that have taken place recently.

The news came as tenants of Stockport council in Greater Manchester voted by 55% against transferring their 13,000 homes to a housing association.

The most effective route to achieving the decent homes standard has been rejected

Ged Lucas, Stockport council director of community services

Ged Lucas, director of community services at Stockport, said that the council would undertake a further options appraisal, but admitted that the "most effective route to achieving the decent homes standard had been rejected".

Other local authorities debating how to meet the decent homes standard received a further set-back this week with the publication of an annual report by the Audit Commission.

The report aggregated all inspections of council housing departments undertaken between July 2001 and July 2002 – a total of 182 inspections.

The commission concluded that the average result was "fair with promising prospects for improvement". Converted into the star ratings used to assess the performance of arm's-length management organisations – the second of the three stock options open to councils – this would give one star.

The government requirement for a council to qualify for an ALMO is a minimum of two stars. This means an average-performing council would not make the grade and so would only be able to pursue a stock transfer or private finance initiative deal to bring its stock up to scratch.

The nao report: main points

  • The higher cost of borrowing for RSLs means that stock transfer will cost the taxpayer £1.2bn more over 30 years than equivalent renovation under local authority ownership. The ODPM, however, considers the additional financial cost to be justified by additional benefits such as early renovation and increased tenant participation

  • RSLs have largely had largely delivered the expected benefits to tenants. Around 72% of RSL homes have been improved, almost all repairs had been made on time, and promises had been met on housing services

  • Most RSLs have kept rent increases within guideline figures, and had met promises on tenant participation.

Source

Housing Today