Sale Of Housing Stock By Rochester Upon Medway City Council (2)

EDM number 672 in 1990-91, proposed by Brian Sedgemore on 27/03/1991.

That this House notes that when the Nationwide Anglia Building Society withdrew from the consortium of lenders organised by Warburgs for the purchase of the housing stock of the Rochester upon Medway City Council by the Medway Housing Society the scheme faced collapse; notes that the scheme went ahead only when the council loaned the Medway Housing Society ú20 million to help it buy the council's own housing stock; notes that this transaction took place on a wanton and reckless basis which no prudent authority could have entered into and that unpublished documents show the serious reservations about this foolhardy scheme held by the City Finance Officer, Bernard Clark, and Richard Gibson, a senior civil servant at the Department of the Environment; notes that the funding model upon which the scheme is based means that the council will get no interest on its ú20 million for seven years and that by that time the debt to it will have risen to ú43 million, but that in those seven years the banks who have loaned ú61.7 million will have received payments of ú54 million; notes that the City Finance Officer, Bernard Clark, reported that all the better trading projections of the Medway Housing Society would favour the banks and has asked what sort of stock might be left and in what numbers at year seven; and believes that this scheme represents financial irresponsibility amounting to gross negligence.

This motion has been signed by a total of 24 MPs.