In his article on prudential borrowing (14 January, page 15), Adrian Carter suggests there is a major problem with the system: “The implications for the revenue account in paying off new debt for major investment would be that many local authorities would have to substantially increase rents.

This is unlikely to be acceptable either to tenants or to their political representatives.”

This, of course, depends on the amount borrowed and the financial health of the local authority concerned. But the argument represents a much more valid objection to transfer, which involves huge amounts of borrowing on the commercial money markets, not only for renovations but also to buy the housing from the council – which has no direct benefit for tenants at all.

Transfer represents a far greater future burden on tenants’ rent than prudential borrowing, and would definitely be “unlikely to be unacceptable”, if only supporters of privatisation had the honesty to point out this fact of life in pre-ballot propaganda. Unfortunately, the long-term cost to tenants is rarely featured in the expensive, glossy brochures being circulated all over the country, at tenants’ expense.

John Marais, Cambridge

Source

Housing Today