Wigan Council has just completed its largest ever single financial transaction.
It has paid the government £99m in a deal which will bring real benefits to the borough’s 22,700 council tenants.
This payment has been made as part of the final settlement over the financing of its council housing business. Previously housing funding has been part of a national system with Wigan having to hand over a large part of its rental income to national government.
The national housing finance system has been transferred from Whitehall to local councils. This means all rent collected stays locally.
The original figure which Wigan was to hand over was over £120m. Dialogue saw this reduced massively to a 50 year loan of £99m using the historically low interest rate of less than 3.5 per cent.
Officers believe they have negotiated a good deal for Wigan’s Council housing business. There are immediate financial gains that officers say will grow in subsequent years, allowing greater investment in improving existing homes and building new ones.
Gillian Bishop, the council’s Corporate Director for Places, welcomed the news. She says: “Since 2002 we have managed the council’s housing stock through an arms length organisation, Wigan and Leigh Housing. Important decisions are taken by tenants and councillors who sit together on the company’s board.”
Rules state that the housing account can only be used to finance the council’s housing business – this means that now the extra money available will be invested in the council’s housing stock.
Ms Bishop adds: “In the past the tenants have been concerned about the millions of pounds of their rents that were going back to the government. After allowing for the additional debt payment of around £3.5 million a year there will be more money available for maintaining the stock. I know from the Tenants Committee they want to see further investment in energy saving measures to counter rising fuel bills.”