21 March 2003
Taxpayers will be millions of pounds worse off during the next 30 years because ex-council homes are being renovated by new landlords rather than by local authorities, the National Audit Office said this week.
In its eagerly awaited report on the effects of stock transfers, the NAO points to previously unreleased government figures which reveal the cost of councils creating housing associations or registered social landlords to take over their stock.
Higher borrowing costs incurred by RSLs, together with the cost of transfer itself, mean that over 30 years it costs the taxpayer £4,200 to renovate each home transferred. If a local authority did the job, the cost would be £2,900 per home.
The figures, calculated in 2001, assumed a hypothetical transfer of 1 million homes over five years – in line with the government target of 200,000 per year. Over the 30 years that it takes to improve the homes, taxpayers will be £1.3bn worse off, says the NAO.
Publication of Improving social housing through transfer was delayed for three months while the National Audit Office and the Office of the Deputy Prime Minister haggled over the detail.
It is understood that the NAO wanted to assess whether stock transfers represent value for money, but such conclusions are now absent from the report, which instead contains numerous references to why the ODPM believes transfer is the best option for improving housing.
The NAO concludes that 'cost neutrality' is unlikely to be achieved but urges the ODPM and the Housing Corporation to keep a close watch on any surpluses raised by transfer landlords.
Although most RSLs are sound financially and carry out work as promised, a minority of tenants are let down. 'Promises are sometimes unclear, leaving tenants uncertain about what they can expect from transfers,' says the report, published on March 19.
Housing minister Jeff Rooker said transfers had meant that homes could be renovated more quickly.
Mark Weeks, spokesman for the anti-transfer group Defend Council Housing, said the NAO had exposed how transfers were a 'criminal waste' of public resources. He said: 'Authorities put so much time into ensuring a "yes" vote that they don't look to see if the business plans stack up.'
Public Accounts Committee chair Edward Leigh said: 'The value for money of transfers must be rigorously assessed against other renovation options.'
PFmar2003
