The Housing and Planning Bill received Royal Assent on 12 May
having spent several days in "Ping-Pong" between the House of
Commons and the House of Lords.
The final sticking point on Part 4 of the Bill had been the
Lords insistence, based on an amendment put forward by Lord
Kerslake, that the Bill be altered to ensure that councils can
retain sufficient funds from the sale of high-value council homes;
and the RTB levy to guarantee replacement with social rented
housing where the council considers this necessary. In explaining
his proposed amendment to this affect in the House of Lords, Lord
Kerslake said:
"First, it [his amendment] seeks to put it beyond doubt that
sufficient funding will be available to local authorities to
deliver at least one new affordable home for each higher-value
property sold; in London this will be at least two for one.
Secondly, it gives a local authority the opportunity, where it can
demonstrate a need for social rented housing in its area, to make
the case for the Secretary of State to consider".
However, in refusing to accept Lord Kerslake's amendment, citing
financial privilege, the government made it clear that they wish to
retain sufficient flexibility to enable them to do "bespoke deals"
with councils on retention of elements of the RTB levy to deliver
replacement of any higher value social rented housing with
affordable housing of various types. In the final debate in the
House of Lords, Parliamentary Under Secretary for Communities and
Local Government, Baroness Williams of Trafford, said:
"I fully understand why the other place has rejected the
amendment: it is because the arguments are so compelling.
High-value vacant housing is a clear manifesto commitment. It will
increase housing supply through the delivery of affordable homes
and extend home ownership by funding the discounts for the
ground-breaking voluntary right-to-buy agreements. I reiterate what
I said yesterday: the manifesto clearly states that the homes sold
will be replaced by new homes. It does not say that there will be
like-for-like replacement because that is not always what
communities need. We want to ensure that new homes serve the needs
of communities. That is why we want to retain flexibility in the
legislation so that the Government, working with local places, can
facilitate the development of the type of homes that communities
need today.
"From the outset, this Bill has enabled the Secretary of
State to enter agreements with local authorities so that they can
retain receipts from high-value asset sales to build new homes.
Through the passage of the Bill, and with the immense scrutiny of
your Lordships' House, we have made it clear that where agreements
are made, they will deliver at least one new affordable home for
each property that is expected to be sold, and in London at least
two new affordable homes for each property expected to be
sold.
As I confirmed yesterday, the term "affordable" includes a
range of different types of housing, from new homes for sub-market
rent to home ownership products such as shared ownership and
starter homes. I also explained that we will compensate local
authorities for transaction costs and the debt supported by the
higher-value housing expected to be sold. After that, we have been
clear that the receipts will be used to fund both right-to-buy
discounts for housing association tenants and the delivery of new
affordable housing. We are not intending to use them for any other
purpose."
"It's clear from the government's response to Lord Kerslake's
proposed amendment that any local authority seeking to retain
elements of its Right to Buy levy will need to deliver value for
money. It seems unlikely that the government will enter into such
an agreement unless the local authority can demonstrate how they're
achieving this; perhaps by putting in their own land or
cross-subsidising the delivery of replacement social housing with
starter homes or other home ownership products.
"It remains disappointing that the Bill has been passed into
legislation some 12 months after the policy of requiring councils
to sell their high-value stock was first announced; and after
months of debate in Parliament, without the government revealing
the "higher-value" thresholds and formula for calculation of the
RTB levy. Councils will now have to wait to see the detail in the
associated Regulations before they will know how much they will
have to pay over and how many council homes they will have to sell
to meet this levy.
"The passage of the Bill has however resulted in a number of
concessions on the original proposals for phasing out of lifetime
tenancies and 'pay to stay'.
"On the phasing out of secure lifetime tenancies, although two
to five year fixed-term tenancies will be the norm for all new
lettings, in certain circumstances councils will have discretion to
grant tenancies of up to ten years and longer tenancies may be
offered to families with children (up to the age of 19) in
education.
On 'pay to stay' the "higher earning threshold" for households
outside London has been raised by £1,000 to £31,000pa and the
additional rent charged will be limited to 15p for each £1, by
which the household's income exceeds the threshold. This is still
likely to mean that a dual earning household with earnings of
£40,000pa outside London can expect to be asked to pay an extra £26
per week on their current rent which will come as a blow to
hardworking families".
ARCH Policy Adviser, Matthew Warburton, has produced an
ARCH
briefing on the Act and the changes to the Bill as it has moved
back and forth between the Lords and the Commons.