ARCH is seeking a meeting with new Housing Minister, Gavin
Barwell, to discuss how stock retained councils can work with the
government to increase the supply of new housing and help meet the
its ambition of delivering a million new homes by 2020, suggesting
a re-setting of policy on Pay to Stay and housing investment
following the ooutcome of the EU Referendum.
In a
letter from ARCH Chair, Councillor Paul Ellis, to the
Housing Minister we underline our support to the government's
ambition but highlight that the evidence so far suggests that it
will now be more difficult to achieve. The outcome of the
Referendum necessarily imposes a review of government priorities
and a re-setting of economic and social policy, however, ARCH
argues strongly that the new government should not step back from
this ambition but take the steps necessary to ensure that it can
still be delivered.
Since the Referendum there has been renewed uncertainty in the
housing market. Share prices in the construction sector have fallen
and there is some evidence that developers and construction
companies have become more cautious about investing. It's too early
to conclude that investment will be permanently curtailed or what
may happen to house prices in the medium to long-term, but we argue
that the government must take early action to restore confidence
and forestall the risk of a construction slowdown. This we argue
ought to include a boost to public investment in housing and a
rebalancing of investment priorities away from the current,
almost-exclusive, focus on homes for sale to a more balanced mix
including homes for sale, shared ownership, market and social rent
according to local needs. ARCH believes that stock retained
councils can play an important role in delivering this.
We recognise that public finances remain tight and there is
limited scope for a significant increase in public borrowing.
Nevertheless, we argue that there is a case for boosting public
investment in municipal housing to avert the risk of an economic
downturn especially when compared with alternative public
investment opportunities, such as in transport infrastructure,
housing investment has the advantages of being faster to show
results and is less reliant on imported goods and services that the
falling pound has made more expensive.
We support the thrust of the recent report by the Chartered
Institute of Housing (CIH) and the Chartered Institute of Public
Finance & Accountancy (CIPFA) "Investing
in Council Housing: The Impact on HRA Business Plans" and have
commended this report to the Minister.
In the letter, we also acknowledge the Government's Manifesto
commitment to extend the Right to Buy to housing association
tenants and to fund this in part by legislating to require local
authorities to sell off expensive properties as they become
vacant.
We've also highlighted that stock-retained councils are
concerned with the implications of the so-called Right to Buy levy
and being required by legislation to sell their higher value
housing stock so soon after the introduction of the self-financing
regime and the debt settlement agreed with the Conservative led
Coalition Government in 2012.
There are clearly many issues still to be addressed in the
practical implementation of the legislation. We've extended the
offer to work with the Minister and his officials to promote the
efficient asset management of council housing without detriment to
the viability of local authority Housing Business Plans under the
self-financing arrangements introduced by the Conservative led
coalition under the Localism Act 2011.
The Housing and Planning Act 2016 has introduced provisions for
payment of mandatory higher rents by so called higher income
council tenants. We've also brought to attention that many of our
members have particular concerns that the Pay to Stay scheme as
planned will not work in some parts of the country and will be
cumbersome and expensive to administer compared to the level of
additional rental income likely to be achieved and therefore will
not raise the expected levels of income for the government as
indicated in Chancellor, George Osborne's summer Budget.
The introduction of Pay to Stay was not a Manifesto commitment
and we've urged the Minister to consider making the scheme
discretionary for local authorities as it is for housing
associations; and if he is not prepared to do so then, as an
absolute minimum, we have urged him to consider delaying
implementation of the scheme until after April 2017 to give local
authorities more time to plan effectively for its implementation in
consultation with DCLG officials.
We'll keep members informed on the Minister's
response.