Thursday, July 03, 2008

Basildon cash is a loan

In April 2007, after a long and tortuous process, Basildon Council established an Arms Length Management Organisation to run the Council's housing stock, St. Georges Community Housing Ltd. The key reason for this was that by establishing an ALMO and obtaining a '2 star' report from the audit commission we were in line for £142 million of government funding in order to raise our Council houses to what is called 'Decent Homes' standard. Basildon's housing operation had already been rated as 2 star so this seemed a reasonable course of action. Now, the Audit Commission have just reported back on St. Georges and they marked them at 1 star, though the report gave inadequate reason for a supposedly precipitous drop in standards and the tenants themselves report a high degree of satisfaction with St. Georges. In any case, the ALMO can be re-inspected within six months, so that is not an insurmountable obstacle. What has now happened is that we have been told that the cash from the government would not be a grant, rather a loan where the government would make some or all of the interest payments. This is news to us, that is the elected Councillors of all parties, and I am sure that the tenants did not know when they voted for the ALMO. Apparently, it was not entirely unknown within the Council organisation, but I have failed to find any report that was ever presented to me that states this rather important fact. However, I have spent some time off with illness and it is possible that this happened while I was unwell, except that none of my colleagues can find any such report either.

Now, a loan of this type to a Council is not the same as personal or corporate debt, but it would add to the already large debt that Basildon has associated with its housing stock and it might leave the Council vulnerable to changes in government funding arrangements for, well, ever.

This is not a good state of affairs to say the least. I sense some late evenings poring over financial projections in my immediate future.

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