Share of Right-to-Buy Sales – Deficit relating to 2004/05
Former tenants of the Council retained their right to buy their homes when the housing stock was sold to the Vale Housing Association in February 1995. The sale agreement included a clause that for ten years the Council was entitled to the proceeds of these property sales above an agreed level and after adjustment for costs and loss of rent.
This arrangement ended in 2004/05. For information, the sums received over the term of the agreement have been as follows:
|
Year |
‘Agreed’ number |
Actual sales |
Excess |
Net sum received* £ |
|
1995/96 |
21 |
81 |
60 |
486,175 |
|
1996/97 |
19 |
88 |
69 |
630,070 |
|
1997/98 |
18 |
126 |
108 |
1,222,950 |
|
1998/99 |
17 |
94 |
77 |
907,808 |
|
1999/00 |
17 |
112 |
95 |
1,829,998 |
|
2000/01 |
17 |
31 |
14 |
477,543 |
|
2001/02 |
17 |
18 |
1 |
28,887 |
|
2002/03 |
17 |
17 |
0 |
(21,433) |
|
2003/04 |
15 |
14 |
0 |
(17,933) |
|
2004/05 |
14 |
5 |
0 |
(6,623) |
|
|
|
|
Total |
5,537,442 |
* until 1998/99 there was a Government levy of 20%
If there were no excess sales the Council still had to pay some of the VHA’s costs in line with the agreement and the Executive agreed supplementary estimates in 2003/04 and 2004/05 when there were no excess sales (payments are a year in arrears).
When the 2005/06 budget was being drawn up it was not possible to predict the number of sales for 2004/05 so no provision was made for any deficit, although it was borne in mind when setting the level of contingency allocated to unforeseen items. In the event the number of sales means that there is a payment due from the Council to the VHA of £6,623. This is the last such payment.
Recommendation
That Members agree to a supplementary estimate from Contingency of £6,623 in 2005/06 to meet the net cost of preserved Right-to-Buy sales that occurred in 2004/05.
Minutes:
(Time: 3.17pm to 3.418pm)
The Executive recalled that former tenants of the Council had retained their right to buy their homes when the housing stock was sold to the Vale Housing Association in February 1995. The sale agreement included a clause that for ten years the Council was entitled to the proceeds of these property sales above an agreed level and after adjustment for costs and loss of rent.
This arrangement had ended in 2004/05. The sums received over the term of the agreement had been in excess of £5.5 million over the ten years, detailed as follows:
|
Year |
‘Agreed’ number |
Actual sales |
Excess |
Net sum received* £ |
|
1995/96 |
21 |
81 |
60 |
486,175 |
|
1996/97 |
19 |
88 |
69 |
630,070 |
|
1997/98 |
18 |
126 |
108 |
1,222,950 |
|
1998/99 |
17 |
94 |
77 |
907,808 |
|
1999/00 |
17 |
112 |
95 |
1,829,998 |
|
2000/01 |
17 |
31 |
14 |
477,543 |
|
2001/02 |
17 |
18 |
1 |
28,887 |
|
2002/03 |
17 |
17 |
0 |
(21,433) |
|
2003/04 |
15 |
14 |
0 |
(17,933) |
|
2004/05 |
14 |
5 |
0 |
(6,623) |
|
|
|
|
Total |
5,537,442 |
If there were no excess sales, the Council still had to pay some of the Housing Association’s costs in line with the agreement and the Executive had agreed supplementary estimates in 2003/04 and 2004/05 when there were no excess sales. Payments were made one year in arrears.
Members noted that when the 2005/06 budget was being drawn up it was not possible to predict the number of sales for 2004/05, so no provision had been made for any deficit, although it was borne in mind when setting the level of Contingency allocated to unforeseen items. The level of sales in 2004/05 meant that there was a payment due from the Council to the Housing Association of £6,623. This was the last such payment.
RESOLVED (by five votes to nil)
that a supplementary estimate be agreed from Contingency of £6,623 in 2005/06 to meet the net cost of preserved Right-to-Buy sales that occurred in 2004/05.