A bit of creative accounting

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THE heated debate about affordable housing has dominated the letters page for quite some time, which begs the question whether or not Arun Council has ever considered a radical approach to solving the problem?

The problem, essentially, is finding the cash to support affordable housing projects and in this area I feel it is high time the financial gurus employed by the council broke with tradition, and tried thinking outside the box – a bit of creative accounting and even lateral thinking.

The council takes millions every year from homeowners in the form of council tax on their properties, but seems to have a very blinkered approach when it comes to exploiting this enormous pot of gold.

If the owners of larger properties in the higher tax bands were offered a substantial discount if they paid either three or five years’ advance council tax (ACT) up front instead of every year, the council would have access to a fresh revenue stream that could help bolster an affordable housing contingency fund.

The positive aspect of such a scheme would be to give the council immediate funds to tackle the affordable houses problem.

On the other side of the coin, wealthy homeowners – those with access to money from former house sales – would willingly pay five years’ ACT if the discount was sufficiently attractive – ie, let’s say your council tax was £2,500 a year and you gained a 15 per cent discount for paying five years’ up front.

The homeowner would pay £10,625, not £12,500, and be ACT covered for five years. The additional income for Arun would be a life-saver.

The council tax register could stamp the ACT as being paid up front. If the homeowner were to sell the house, the new owner would inherit the ACT agreement and pay the balance accordingly. The outgoing owner would be rebated.

The property, therefore, would be either ACT paid or not paid.

In the current shaky economic climate, when cash resources are drying up, it could be worthy of serious consideration.

Some five years down the line, when David Cameron has the Labour-inspired debt mountain under control, government funding to affordable housing will increase and the climate will be much more stable.

I’m sure some bean counter will run a slide rule over it and judge it impractical.

Just a thought!

Geordie Campbell,

Barrack Lane, Aldwick