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General Election 2015 – John Bibby, ARCH CEO, outlines the ARCH response 14/05/2015

The outcome of the General Election wrong footed most political commentators who had predicted a hung parliament and some form of coalition government led by one or the other of the major parties. The election of a Conservative government with an overall majority means that the policy direction is much clearer and at least, in outline, we know what we can expect in terms of the manifesto pledges on housing from the new government and its implications for the stock retained sector.


With one exception there were few surprises in the Conservative manifesto and we can expect more of the same:

  • A continuation of austerity measures and cuts in public expenditure as part of the government's long term economic plan. Councils can therefore expect to have to make significant further savings on their General Fund budgets and find innovative ways of delivering services
  • Welfare reform will continue and Universal Credit will be rolled out across the country. The Spare Room Subsidy (Bedroom Tax) will remain and a further £12billion savings in the welfare budget will need to be found
  • The drive to build more homes will continue but with greater emphasis on owner-occupation and help for first time buyers


These policies will make for a difficult working environment for councils and for council landlords and their housing business plans and there will be significant challenges in maintaining rental income levels and increasing the supply of affordable rented accommodation.


The big surprise was the commitment to extend the Right to Buy to housing association tenants. On face value this doesn't seem to present a risk to council landlords however the plan is that Right to Buy discounts given to housing association tenants are to be funded by a requirement for councils across the country to sell their higher value council housing as it becomes vacant to fund this policy.


The policy is expected to feature in a new Housing Bill to be announced in the Queen's Speech on 27 May. Details of how this policy will be applied are sketchy at the moment but the manifesto proposal is outlined in an ARCH Briefing 18/2015 (see separate item in this Bulletin).


Many councils, even those stock retained councils that welcome the extension of Right to Buy to housing association tenants, will feel uncomfortable that they are to be forced to sell some of their council stock on the open market and hand over the capital receipts to cross-subsidise housing association discounted RTB sales.


Housing is a devolved function in Scotland and Wales and, following in the wake of the Scottish government, consultation by the Welsh Government to abolish the Right to Buy for council tenants in Wales concluded on 15 April 2015. However in England stock retained councils are going to have to continue to adjust their housing business plans to take account of Right to Buy sales and to plan for the impact of the compulsory sales of higher value homes.  


The policy of forced sale of council stock on the open market goes against the principles of self-financing introduced only 3 years ago under the Localism Act. Whilst there is a promise of one for one replacement, in the form of lower value housing, the experience so far suggests that this has been impossible to achieve in practice.


What will ARCH be doing in response?


The stock retained sector needs a strong voice and we will be working closely with ARCH members over the coming months to formulate our response to these challenges.


We will continue to share best practice and ensure ARCH members are fully briefed through our regular e-bulletin and policy briefings and will be holding a series of regional seminars to engage and consult with ARCH members on the expected new housing bill when published.


We will continue to argue and make the case for the objectives set out in our own manifesto and will work closely with the National Federation of ALMOs (NFA) to promote the manifesto aims. We will be seeking an early meeting with the Housing Minister and will use our contacts with DCLG and DWP to make the case for stock retained councils and influence national housing policy agenda.


It remains to be seen whether, with increasing calls for devolution in England, housing will become a devolved function as it is in Wales and Scotland. The way in which central government powers are devolved under the Greater Manchester devolution arrangements and development of the Northern Powerhouse may point the way for other cities and regions.


These are exciting but challenging times for the stock retained sector. The ARCH Executive Board will be meeting on 18 May to assess the new political landscape and the threats and opportunities it presents and will begin to develop a strategic response from ARCH to ensure that council housing continues to have a long term sustainable future.


ARCH will continue to seek to persuade central government of the importance of the stock retained sector in providing decent, well-managed, affordable public housing and the significant role it has and should continue to have in meeting people's housing needs.

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