MPs demand impact assessment of Right to Buy on council finances
0
Government officials don’t know how they will pay for the extension of Right to Buy to housing association tenants if councils cannot raise enough money, according to a report from MPs on the Public Accounts Committee. The report calls on the government to assess the full impact of Right to Buy on local authorities.
The Housing Bill, currently working its way through Parliament provides for councils to pay an annual levy – yet to be decided – to pay for discounts for association tenants in addition to replacement council homes.
But a report by the Public Accounts Committee (PAC) says that Department for Communities and Local Government officials were unable to tell members what will happen if there is a shortfall.
Meg Hillier MP, Chair of the PAC, said: “The approach to paying for this policy seems to be entirely speculative.
“On the basis of evidence heard by our committee, there are no costings or workings out.
“We are not talking about a ‘back of an envelope’ calculation—there is no envelope at all.”
The report called on government to publish a full impact assessment of its proposals to extend the Right to Buy to housing association tenants, including the financial impact on local authorities.
The recommendation says the department examined the “financial impacts on local authorities, how these vary geographically, and the financial transfers between local authority areas, showing net flows of money between local authorities making payments, and areas where the funding is financing the construction of new homes.”
Terrie Alafat, chief executive of the Chartered Institute for Housing, said: “We welcome the PAC’s report and recommendations.
“It addresses many of our concerns about the way policy has developed to date, including the need to make sure that the scheme’s finances stack up so that we don’t see a net loss of the affordable homes to rent that we so desperately need.”
This week, homelessness charity Shelter estimated that councils will be forced to sell 23,500 homes a year to recoup an average of £26m each.
Birmingham would top the list, Shelter claimed, with the council needing to raise a £145m per year from the sale of its council houses, followed by Leeds (£129m) and Southwark (£122m).
Campbell Robb, Shelter’s chief executive, said: “With millions of families struggling to find a home they can afford, forcing councils to sell-off huge swathes of the few genuinely affordable homes they have left is reckless.”
He said that the Housing Bill makes no commitment to replace homes sold like-for-like, meaning affordable homes could be replaced by Starter Homes costing up to £450,000.
