Tenants benefiting from housing transfers

24 March 2006 Share this LinkedIn

The transfer of council housing ownership is bringing benefits for tenants, says an Audit Scotland report published today. The report also finds that management of transfers is improving but better, clearer
measures are needed to assess impact and value for money.

The report, Council Housing Transfers, says the hand over of more than 100,000 council homes to new landlords since 1998 has brought more investment in properties - doubling it in Glasgow - and promoted tenant control. It is facilitating increased repairs and maintenance and the building of new homes, and is keeping rent increases down.

The Scottish Executive should now reinforce its approach with clearer goals and measures for quality of service and tenant involvement. This would help increase the overall impact and the value for money of transfers. During this year and next, six more councils will transfer a total of 50,000 homes.

The seven completed transfers that Audit Scotland examined in the report will result in £3.2 billion of investment into properties over the next 30 years. This is significantly more than the councils involved previously spent. Annual rent increases will be kept to one per cent or less in real terms, compared with average rises of three per cent a year in real terms under council ownership.

These results are possible partly because HM Treasury is paying off the historic housing debt of councils that undertake transfers. This allows income from rents to be invested in improving service to tenants and refurbishing homes, rather than paying for debt.

Auditor General for Scotland Robert Black said: “Council housing in Scotland needs a lot of money to bring it to a decent standard. Paying off historic housing debt during transfers is freeing landlords to invest in improving properties, which is a significant benefit for tenants. By giving tenants more control and responsibility for housing management, transfers should also support better housing management.”

Each new landlord now has tenants making up at least one-third of its governing body, but there have been different approaches to tenant involvement. More than half of tenant groups responding to an Audit Scotland survey undertaken for the report say transfers have produced a big improvement in participation. But a quarter of tenant groups has seen no difference and one in ten say it has worsened.

The report says the central guidance for the earlier transfers did not provide a good route map and the Scottish Executive and councils under-estimated the workload involved. The first seven transfers incurred costs of £59 million. However lessons have been learned and new national standards and targets introduced in 2004 have greatly improved the strategic direction and guidance. These new standards cover all landlords of social housing, including councils that retain their properties.

Accounts Commission Deputy Chair Isabelle Low said: “This comprehensive assessment of the transfer policy so far shows that many tenants are now benefiting from the higher investment it makes possible. Looking ahead, the challenge for councils is to take action to achieve the new national standards for decent homes for their tenants.”