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The ARCH annual report for 2015-16 is now available to view.

 

Download it here.

Call for extension of RTB to be funded by central government rejected 13/04/2017

In February 2016, the Communities and Local Government Select Committee published a report which supported representations made by ARCH. The report called for the extension of the Right to Buy (RTB) to housing association tenants to be funded by Central Government rather than through the so called high value asset levy on stock retained councils.

 

Regarding the government's proposal to impose a levy on stock retained councils, the Select Committee said:

 

"We believe in the principle that public policy should usually be funded by central government rather than through a levy on local authorities, especially as (in this case) the impact of this levy will fall only on some local authorities, yet will be applied nationally."

 

In its response to the Select Committee and recommendations published on 4 April 2017, the government flatly rejected the Committee's recommendation, stating in response:

 

"The government does not accept this recommendation. We made a clear commitment to fund the extension of Right to Buy discounts to housing association tenants by requiring councils to manage their housing assets more efficiently, with the most expensive properties sold off and replaced as they fall vacant."

 

The government's response to other recommendations in the Select Committee's report give little away regarding decisions on the definition of "higher value" council housing that stock retained council's may be forced to sell off to fund the levy stating in their response:

 

"The definition of "higher value" will be set out in regulations which will be subject to the affirmative process" and "We are now considering the higher value definition and expect to make an announcement in due course."

 

Despite making it clear that the extension of RTB discounts to housing association tenants would be funded by requiring councils to sell off the most expensive properties, the government's response to the report goes on to seek to separate the two policies stating:

 

"The voluntary deal with the housing association sector is entirely separate to ongoing work to determine the level of payments from the sale of vacant higher value council housing. The National Housing Federation has been clear that how Right to Buy Discounts are funded is a decision for Government."

 

The government's response opens the door to the possibility that the higher value asset levy may be used, not just to compensate housing associations for RTB discounts they give to their tenants and replace those council homes that have to be sold but that the levy may be used to raise capital to fund the government's wider housebuilding programme saying in its response:

 

"Where local authorities do not make an agreement(to retain a portion of payments to deliver at least one [two in London] new affordable homes for each one that is expected to be sold)the funding will be returned to Government to invest in additional homes".

 

"We have also been clear that a portion of payments in respect higher value vacant housing will be used to fund the delivery of new homes."   

 

Read the government's full response to the Select Committee.

 

ARCH chief executive, John Bibby, comments:

 

"ARCH is disappointed that the government has rejected the Select Committee's recommendation that the policy of extending a Right to Buy to housing association tenants should be funded by Central Government rather than through a levy on local councils. 

 

"In its own submission to the Committee inquiry, ARCH argued that the proposal to fund the extension of RTB to housing association tenants by forcing councils to sell so called "high value" council housing, is both unfair and ill-conceived as well as being contrary to the principles of localism and the self-financing settlement entered into in good faith by stock retained councils in 2012. 

 

"Councils do not receive any direct government funding to reimburse the cost of RTB discounts for council tenants exercising their RTB - the cost of which is in effect borne by council tenants through the housing revenue account - and it is therefore doubly unfair that the limited number of stock retained councils in England and their tenants should be asked to reimburse housing associations for the cost of RTB discounts provided to housing association tenants."

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