Huge debt could bring prosperity

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GOING from being a debt-free local authority to owing more than £67m could ultimately bring prosperity to South Holland.

Council house tenants are to be encouraged to buy their homes to help pay off South Holland District Council’s housing debt and kick-start the economy.

Coun Roger Gambba-Jones told last week’s full council meeting: “Owning your own property stimulates the economy. That’s how we got out of the last depression, by people being able to access their capital.”

Taking on the debt was one of the most important decisions the district council has had to make, according to Coun Paul Przyszlak, portfolio holder for strategic finance and democratic services.

He said: “This decision will bring an end to the so-called subsidy system that will cost its tenants £4.5m in the current financial year.”

The district council is paying central government £67,455,541 as its share of the national housing debt. This follows a self-financing valuation of its housing business, currently standing at just over 4,000 homes, at £75m.

The money has been borrowed over 50 years from the Public Works Loans Board at the interest rate available on March 28, expected to be 3.5 per cent.

Councillors were reassured there would be no implications of the loan so long as there was value in the housing stock. Should the district council become part of a unitary authority, the debt would be passed on.

Income from the houses came from rents and from the sale of stock. Each unit costs £15,000 to build and put on sale. Although 75 per cent of the purchase price goes back to the Government, it creates a pot of money the council could access in the future.

Coun Gambba-Jones urged future councils to use surplus revenue for new houses and “not squander it on plans for leisure centres”.

Coun Christine Lawson, portfolio holder for housing, said: “When the 50 years is up I will be 117, but I will be back to see these houses.”