As part of its ongoing campaign on housing issues the Scottish Tenants Organisation has written to the Chancellor of the Exchequer, Alistair Darling asking him to write off all of Scotland`s council housing debt ( £2.2Billion ).
The S.T.O. believes that historic housing debt is an unjust imposition on remaining council tenants and must be removed. Removing this burden would solve virtually all our investment problems in one act as it would release huge amounts of money to allow councils to invest in their stock.
Government insistance on housing stock transfer to achieve debt write off amounts to coercion and this coercion is being applied for purely ideological reasons. There are no good financial reasons for it.
We have pointed out to the Treasury that according to Audit Scotland, writing off this debt would not cost the country one penny more than at present, because as they say, it would be a transfer within government and have no cost or benefit to the Exchequer or the taxpayer ( “This form of debt repayment is not in itself a cost to government in cash terms. The original borrowing and the investment it funded-was a cost to government. But subsequent debt interest and repayments are transactions entirely within the public sector, so there is no net effect ( cost or benefit ) for the Exchequer or the taxpayer when the Treasury provides grant aid to allow repayment of a council`s PWLB loan debt. These are transfers within government”). ( Source: Audit Scotland= Council House Transfers Report, March 2006 ).
The response from the Treasury was that “ Debt write off is all very well, however if council debt was absorbed by the Treasury, councils would be encouraged to begin borrowing again thus upsetting Treasury fiscal rules on government borrowing limits”.
We have since written back asking for a meeting to discuss this issue as
we believe that this is only an excuse and that there are ways to get round the problems raised by the Treasury. An update will be provided when we get a reply.
The new Scottish Government supports the idea of housing debt write off and have also raised the matter with the UK Treasury. The issue was raised with Stewart Maxwell at our meeting with him on 16th January 08 where we suggested the possibility of joining forces and of applying joint pressure on Alistair Darling. Unfortunately Mr Maxwell was non committal at the time. However as we continue this campaign we hope, in the interests of tenants, they will reconsider.
Also following on from the 16th January meeting at the Scottish Parliament we have written to Stewart Maxwell asking for a meeting to discuss one of the issues raised with him on the day, namely The Local Housing Need and Affordability Model for Scotland which is the method used by authorities to calculate housing need in their respective areas. A number of major problems arise from this Model. Firstly, it proposes that public housing and Housing Association properties should only be made available as a last resort, with everyone else forced to rely on the market even if it leaves them just above benefit levels. Secondly, using the Model, councils only have to meet 1/10 of the backlog of housing need each year and can claim they have surplus housing despite large waiting lists.
If the Scottish Government is serious about tackling housing need, this Model needs to be dumped.
More Later.
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Chair’s comments – March 08
By scottishtenantChair’s comments
As part of its ongoing campaign on housing issues the Scottish Tenants Organisation has written to the Chancellor of the Exchequer, Alistair Darling asking him to write off all of Scotland`s council housing debt ( £2.2Billion ).
The S.T.O. believes that historic housing debt is an unjust imposition on remaining council tenants and must be removed. Removing this burden would solve virtually all our investment problems in one act as it would release huge amounts of money to allow councils to invest in their stock.
Government insistance on housing stock transfer to achieve debt write off amounts to coercion and this coercion is being applied for purely ideological reasons. There are no good financial reasons for it.
We have pointed out to the Treasury that according to Audit Scotland, writing off this debt would not cost the country one penny more than at present, because as they say, it would be a transfer within government and have no cost or benefit to the Exchequer or the taxpayer ( “This form of debt repayment is not in itself a cost to government in cash terms. The original borrowing and the investment it funded-was a cost to government. But subsequent debt interest and repayments are transactions entirely within the public sector, so there is no net effect ( cost or benefit ) for the Exchequer or the taxpayer when the Treasury provides grant aid to allow repayment of a council`s PWLB loan debt. These are transfers within government”). ( Source: Audit Scotland= Council House Transfers Report, March 2006 ).
The response from the Treasury was that “ Debt write off is all very well, however if council debt was absorbed by the Treasury, councils would be encouraged to begin borrowing again thus upsetting Treasury fiscal rules on government borrowing limits”.
We have since written back asking for a meeting to discuss this issue as
we believe that this is only an excuse and that there are ways to get round the problems raised by the Treasury. An update will be provided when we get a reply.
The new Scottish Government supports the idea of housing debt write off and have also raised the matter with the UK Treasury. The issue was raised with Stewart Maxwell at our meeting with him on 16th January 08 where we suggested the possibility of joining forces and of applying joint pressure on Alistair Darling. Unfortunately Mr Maxwell was non committal at the time. However as we continue this campaign we hope, in the interests of tenants, they will reconsider.
Also following on from the 16th January meeting at the Scottish Parliament we have written to Stewart Maxwell asking for a meeting to discuss one of the issues raised with him on the day, namely The Local Housing Need and Affordability Model for Scotland which is the method used by authorities to calculate housing need in their respective areas. A number of major problems arise from this Model. Firstly, it proposes that public housing and Housing Association properties should only be made available as a last resort, with everyone else forced to rely on the market even if it leaves them just above benefit levels. Secondly, using the Model, councils only have to meet 1/10 of the backlog of housing need each year and can claim they have surplus housing despite large waiting lists.
If the Scottish Government is serious about tackling housing need, this Model needs to be dumped.
More Later.
This entry was posted on May 1, 2008 at 3:45 pm and is filed under Chair's Comments. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.