Lambeth council may be forced to sell off some of its housing stock to repay government debt
By Robert Firth, Local democracy Reporter
Lambeth council – which has 40,000 families waiting for a home – may have to sell off council houses to repay a £40 million government bailout.
Zena Cooke, Lambeth council’s corporate director of finance, told a meeting on Thursday that the money-making initiative was one option the local authority was considering in order to cover its debt costs.
Ms Cooke made the remarks on the same day that the government announced it had approved the Labour-run council’s request for a £40 million rescue package to help balance its Housing Revenue Account (HRA).
The HRA records the costs and income associated with running a council’s housing stock. Without the bailout Lambeth would have been unable to set a balanced HRA from April, which it is required to do by law.
Ms Cooke said: “One of the options [to balance the HRA] will have to be consideration of disposals where they meet the criteria for disposal in order to generate a receipt that would allow us to pay the debt cost.
“From a finance perspective and from a value of money perspective, it is not sensible to dispose of assets that are going to have future income generation possibilities or are an asset that you would want to keep. However there are also those assets that are extremely expensive to maintain or repair and uneconomic to keep.”
Ms Cooke warned that the council may not be able to balance the HRA again next year due to other financial obligations, such as maintaining its existing housing. She added that officials may have to seek assistance from the government again.
Lambeth has the second highest number of people on its council housing waiting list in London, slightly fewer than Newham in East London. Almost a quarter (23 per cent) of families waiting for a council home in the capital are waiting for a property in the two boroughs.
Lambeth is also the second largest council landlord in London with 23,600 social housing properties. It was the only council to receive a bailout specifically for its HRA from the Ministry of Housing, Communities and Local Government on Thursday.
Pictured top: Lambeth town hall (Google Street View)