During debates on the Housing & Planning Bill in the Commons
Ministers have signalled a willingness to open up early talks with
councils in high-value areas regarding agreements to retain some of
the RTB levy to enable one for one replacement of any high-value
council houses sold.
Clause 72 of the Housing and Planning Bill
allows the Secretary of State to enter into an agreement with a
local authority for the authority to retain a portion of the
capital receipts that would be raised through the sale of
high-value council housing to deliver replacement housing (or as
Ministers refer to it: "additional housing") for those high-value
homes sold under the policy.
Some ARCH member councils in high-value areas have already
approached the DCLG about entering into such agreements and details
are beginning to emerge about how this might operate:
Early indications from such discussions suggest that:
- DCLG is at an early stage in its thinking about the potential
approach towards entering into agreements with local authorities to
provide replacement homes in-lieu of paying all or some of the
levy. However, DCLG are keen to enter into a dialogue with councils
to replace high-value voids that are sold.
- DCLG are still working on the high-value thresholds to be
applied and are working through the information provided by
councils following the request for information sent to local
authorities at the end of 2015 about voids etc.
- DCLG officials are looking at putting forward a range of
options to Ministers of how the thresholds could be set (e.g.
national, regional, local etc.)
- DCLG officials are looking at the possibility that any
newly-built replacement properties would be exempted from the
high-value voids policy, possibly through an exemption applying for
all properties built after a specified date.
- DCLG are looking to lay down the required Regulations that
would define "high-value thresholds" within a week or so after the
Housing and Planning Bill received Royal Assent - possibly around
the end of April/beginning of May 2016 with the Regulations laid
around mid-May 2016.
- The Regulations would set out the approach/framework to how the
high-value thresholds would be calculated, including details of
which types of void properties would be exempt. The intention being
to give local authorities a clear idea of how their individual
levies would be calculate.
- Separately DCLG intend to set out a draft determination, around
the same time, of individual payments to be made by each individual
local authority, based on the approach/framework set out in the
regulations. The Bill as drafted obliges DCLG to consult all local
authorities on the draft determinations and this is likely to
commence around the same time as the regulations being laid
- In regard to payment of the RTB Levy, the likely timescale for
when the first payment would be required from stock retained
councils may be around January 2017. If this is achieved, it would
be a payment for one quarter only, based on 25% of the
previously-advised annual determination for the local authority. In
regard to subsequent payments for 2017/18 onwards, it is understood
DCLG are working on the basis that local authorities would continue
to make quarterly
payments to the CLG.
- It is also understood that DCLG may consult local authorities
on how future payments under Clause 72 (i.e. beyond the first
payment) should be calculated to reflect changing vacancy rates and
changing property prices.
- DCLG is yet to finalise how any agreement process may operate
and it is likely that they may consider setting up a
working/technical group to consider all the issues relating to
agreements to provide replacement properties.
We'd be interested to know if your council has approached the
DCLG regarding the possibility of entering into an agreement under
Clause 72 of the Bill and if so whether the response you have
received chimes with the points above.
If you have had discussions with DCLG on entering into an
agreement under Clause 72, please email:
John Bibby, ARCH chief executive.