Coventry’s council houses will be transferred to a private company, paving the way for £240m of repairs.

The council last night voted to allow the transfer of the 20,000 homes to the Whitefriars Housing Group next month.

The government has agreed to pay off the “over-hanging debt”, which the council still owed on the houses for building them.

The state of repair of many of the houses has got so bad that it would cost more to repair them than they are worth.

This meant that a private firm would be reluctant to take the houses on, and the council would still have to worry about paying back the debt.

Under the terms of the agreement, tenants, councillors and independent people will form a board to monitor the new group’s activities.

Rents increases are to be pegged at inflation plus one per cent for five years. Existing tenants will also have this guarantee for a further 25 years.

Cllr Dave Nellist (Socialist, St Michael’s) warned that new tenants did not seem to be protected in this way.

And he said with housing turnover running at about 10 per cent of tenants a year, this meant that within a few years the majority could be exposed to massive rent increases.

Cabinet member Cllr George Duggins, introducing the motion, said Coventry had made a major breakthrough in securing the agreement with government, as the DETR will now pay the money straight to the Public Works Loans Board.

He said:

“Other councils facing this situation will have Coventry to thank for this breakthrough.”

He added that maintenance contracts had initially been awarded to Coventry Contract Services, and their future would rely on tenants’ satisfaction with the work.

Cllr Tim Sawdon (Conservative, Wainbody) said the Conservative were supporting the transfer, as it was a primarily Tory policy.

He said:

“This decision should have been taken years. We know why it was not. The decision was not taken in the hope that the Labour government would stump up the cash to keep the houses in municipal control.”

Cllr Peter Lacy, who will be the Whitefriars chairman, said:

“Last night’s vote is another major step forward on what has been a long journey towards transfer.

“While it was vital that councillors voted for approval, we acknowledge that a lot must still happen between now and 18 September for the transfer to go ahead smoothly and seamlessly.”