IN RECENT weeks Oxford City Council has been seeking to borrow £200m – a huge sum in the current climate of austerity.

But the Town Hall must saddle itself with the extra debt to gain control of its own council houses.

Explaining the borrowing to me recently, the city council seemed remarkably relaxed. For it all came down to a shake-up in council house funding.

This one-off payment means in future the council could keep the money it collects from council house rents, instead of having to hand over a chunk of its rental income to Central Government each year.

Now, however, the city council, is feeling less comfortable with the arrangement.

For it will take on the debt just as it faces the prospect of having to sell off council homes as a result of right-to-buy.

David Cameron plans to tempt tenants to buy their council houses with discounts of up to £75,000.

As reported in last week’s Oxford Mail, council house sales in Oxford had all but dried up – just two were sold last year – with the local right-to-buy scheme offering a £16,000 discount.

The new inducement to buy looks set to put council house sales at the top of the political agenda, returning us to the days of Margaret Thatcher.

Mr Cameron says it unlocks the aspirations of a generation of home-buyers. The city council says it increases the chronic shortage of affordable rented family housing, impacting on homelessness.

City council board member for housing, Dr Joe McManners, said: “We do not want to borrow to build houses on the back of rental income, only to find them sold off, so we can’t pay the money back.”

The council faces a £200m payback figure because it owns 7,800 homes.

Under the complicated existing arrangements, it has to hand over about £13m of its income to Central Government, which is then distributed to “less well-off” councils.

Housing Minister Grant Shapps insists that the new discount should see no reduction in affordable house building – with money from council house sales going back into new house building.

But Dr McManners fears there would be insufficient money to pay for new like-for-like homes.

Even if there was, the lack of available land for building in Oxford would make this impossible.

The Town Hall says the Government has also confirmed new council homes would not need be built in the same place.

So council homes sold off in Oxford could be replaced by new houses in a cheaper area.

Whoever the new right-to-buy winners turn out to be, the occupants of Oxford Town Hall do not expect to be among them.