MORE than £100 million of debt piled upon Swindon Borough Council when it chose to retain ownership and control of its council housing should be cancelled.

That is the view of a tenants group which says such a move might be the only way to prevent the authority going bust as it attempts to recover from the coronavirus lockdown.

The debt was parcelled out by the government in 2012, when councils were asked to decide whether to keep their houses or sell them to a housing association.

Swindon tenants voted the council should keep the stock – and it’s allocation of the government’s housing debt was £138m. The council spends about £8m a year servicing that debt.

Secretary of the Swindon Tenants Campaign Group Martin Wicks said: “Councils have been seriously weakened after 10 years of austerity. The financial consequences of the pandemic after 40 per cuts in government funding of local authorities threatens the collapse not only of council services but of whole councils.

"Under current conditions, without the government covering extra costs and lost income, then setting a balanced budget will mean drastic cuts in services for next year.

“But even if the government does provide funding the financial impact of the pandemic will not be limited to one year.

"Even without a second spike of the virus there is no way that revenues will return to their pre-Covid level because of the fear of the population of catching it and the economic impact of the lockdown, including large-scale unemployment.

“Cancellation of local authority debt would also include council housing debt. For Swindon it would provide over £8m a year extra for our council housing.

"While this won't resolve the underfunding of council housing it would help stabilise the situation. Owing to the lockdown the housing department is faced with a big backlog of repairs work.”

In exchange for the debt being passed from Whitehall to Swindon, the council gets to keep all the rent its tenants pay on its 10,300 properties.

Cabinet member for finance Russell Holland said: “The decision was made by the tenants who voted overwhelmingly to remain with the council and take on the additional debt of £138m, making a total debt of just over £149m.

“We always do our best for tenants, but we now have to do that within the financial constraints of that debt which we are still paying off and which currently stands at around £104m”.