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ARCH seeks meeting with new Housing Minister 10/08/2016

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.

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ARCH Member Comments 9 people like this

  • Mick Daniels, Sheffield CC - 05 August 2016

    Will he listen and will he take notice of what Scotland have done