There’s nothing like a bucket of cold water from HM Treasury to keep one’s feet on the ground. Whilst tenants may dream of exercising the Right to Transfer as a way to increase community control and wellbeing, we are reminded that the bean counters do not care tuppence for such airy fairy concepts. In this respect at least, tenant led stock transfers are on an equal footing with local authority led whole stock transfers.
Never mind the quality, show us the money
The message is pretty clear, what matters is that the transfer offers a good deal to the Treasury. In these harsh fiscal times it is no surprise that the focus is now really on value for money for the taxpayer. Having cleared the decks with the self-financing settlement of Council Housing Revenue Accounts the Treasury is not readily going to shower stock transfers with money to pay off overhanging debt. There needs to be a really good case for the Government to spend additional money to pay for a transfer. This doesn’t mean that transfer is not possible and as the Government has set aside funding to pay off overhanging debt (I’ve heard from £100m to £450m) it clearly anticipates some will go ahead by March 2015.
So what does this mean for tenants hoping to use the Right to Transfer?
Firstly, it is as well to know that there are no free rides for tenant led stock transfer, the Big Society agenda cuts no ice at the Treasury. For Right to Transfer (RTT) proposals between 100 and 499 homes the situation is simple – there is no debt relief available. In some cases the may make transfer non-viable, but if the financial case still adds up then it some ways life is easier as the Treasury will be less interested. RTT transfers of 500+ homes are eligible for overhanging debt relief and this is clearly a potential benefit to offer to a reluctant local authority. The big challenge to tenant groups using RTT will be to demonstrate value for money to the taxpayer.
What value does tenant control add?
This is clearly the key argument that tenant groups need to articulate under RTT. I’m in no doubt that in practice tenants will be more effective custodians of their own homes than a local authority with many more competing demands on its resources. With full control over investment there will be scope to act far more as a social enterprise and make an impact beyond housing management. There is much to do in terms of employment, education, heath, crime, substance abuse, domestic violence, poverty, debt, teenage pregnancy, social exclusion and other challenges of multiple deprivation. The challenge is to be clear about how an RTT stock transfer proposal will do to address these issues and put an monetary value on this. Fortunately there are accepted Social Benefit models which can be used as part of a financial assessment and monetise the expected benefits.
Looking two ways at once
No-one said that using the RTT was going to be easy. Any tenant group pursuing RTT needs to come up with a plan that is attractive to tenants, that delivers investment and control so that tenants will vote in favour of the transfer. At the same time the plan needs to minimise the impact on the public purse and maximise the return to the taxpayer. Satisfying these sometimes contradictory agendas will require a great deal of hard work and creativity.