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Statement on the Notifiable Transaction under Standing Order No. 19.20 on the Bridgend Stock Transfer

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Edwina Hart: The Minister for Social Justice and Regeneration
The Minister for Social Justice and Regeneration (Edwina Hart): Bridgend County Borough Council transferred its total housing stock to the newly formed Valleys to Coast Housing Association on 12 September. This transfer will generate sufficient investment to enable the stock to be brought up to the Welsh housing quality standard by 2012. The council has undertaken this exercise in accordance with the Welsh Assembly Government’s housing stock transfer guidelines, and has kept the Assembly Government informed throughout the process.

The private investment in the transfer will be provided by a consortium comprising the Nationwide building society as principal lender and the Principality building society in a subordinate lending role. The involvement of the Principality from a Welsh point of view, and the fact that both lenders are mutual societies, is particularly noteworthy. The business plan of the new social landlord anticipates expenditure of some £70 million on the housing stock over the next five years.

The Welsh Assembly Government has made a published commitment to provide financial support to local authorities considering stock transfer where there is a shortfall in the valuation proceeds. In the Bridgend transfer, funding is required to meet a negative valuation of £7.7 million, setting-up costs of £2.3 million, disrepair claims in the range of £3 million to £5 million, and finance costs estimated to be approximately £1 million. This funding will be met from the housing resources that would have been available to Bridgend council if the transfer had not taken place. As a result, there will be no additional cost to the Assembly.

At present, a VAT mitigation scheme exists. Valleys to Coast Housing will be protected against any future changes to VAT rules that would result in a liability to pay VAT on the proposed works. We have secured a payment of £49.85 million from the Treasury to write off Bridgend’s public works loan board debt.

Earlier this year, I gave approval for the Assembly to provide financial assistance towards the cost of establishing a construction industry training centre in the Caerau area of the Llynfi valley. This pilot project will provide places for 45 local trainees per annum. The training aims to equip the trainees with the necessary qualifications for employment within the construction sector in Bridgend. This major investment in Bridgend will provide good quality affordable housing, and will offer wider social and economic regeneration.