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
- 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
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
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
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
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