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Parliamentary Select Committee supports ARCH calls for extension of RTB to be funded by Central Government 10/02/2016 Labelled as Consultation

The Communities and Local Government Committee (CLG) launched an Inquiry into the viability and sustainability of housing associations looking in particular at the impact of extending the Right to Buy (RTB) to Housing Associations and the four year mandatory reduction in social rents announced in the Summer Budget 2015.


We submitted representations to the CLG Committee Inquiry arguing that the proposal to fund the extension of RTB to housing association tenants should not be funded by forcing councils to sell council housing in high value areas.


We argued that stock retained councils have never received government funding towards the cost of providing RTB discounts for council tenants and the cost of giving RTB discounts for council tenants has been borne by the remaining tenants who cannot afford to (or do not want to) exercise the RTB.


We made the case to the Committee Inquiry that it is doubly unfair that the remaining stock retained councils and their tenants should now be asked to help fund the payment of RTB discounts to housing association tenants and the construction of replacement housing association homes.


The CLG Committee published its report and findings on 10 February 2016. In regard to funding the cost of extending the RTB to housing associations, ARCH welcomes the CLG Committee's recommendation in the Report that the"extension of Right to Buy to housing association tenants should be funded by central government rather than a levy on local councils" - this being what we argued in our submission to the Inquiry.


The Committee disagrees with the government proposal to fund the RTB discounts for housing association tenants with the proceeds from the sale of high value council homes. The Committee also finds the funding model for the RTB discounts to be extremely questionable and calls on the government to set out the fully costed evidence for the proposals.


The Committee findings are that large numbers of homes sold through the statutory RTB for council tenants have quickly become private sector rental properties. The Committee believes the potential for selling social housing assets at a discount, only for them to become both more expensive and possibly lower quality housing in the private rented sector, is a significant concern


The Committee also considered the proposed 'pay to stay' policy, where differential rents would be charged according to tenant income, and welcomes the government's announcement that this will be voluntary for housing associations. The Committee believes the suggested thresholds should be reviewed and supports housing associations being given local discretion, should they choose to adopt the policy.


The Committee also recognised the scale of the government's policies regarding Starter Homes and the new legal duty on councils to ensure provision of 200,000 new Starter Homes across all reasonably sized sites. However the Committee recommends that Starter Homes should not be built at the expense of other forms of tenure if there is a local need for affordable rented accommodation. It is important that homes for affordable rent are built where the need exists, particularly as Starter Homes can now count towards satisfying the affordable housing allocation in section 106 agreements.


Although it is doubtful that the Committee's recommendations will change the Government's mind on these issues, the pressure is mounting and the timing and findings in this report will no doubt impact on the debate on the Housing & Planning Bill in the Lords and ARCH will continue to make the case for council housing, stock retained councils and their tenants.


The CLG Committee Membership is as follows: Mr Clive Betts (Chair, Lab), Bob Blackman (Con), Jo Cox (Lab), Helen Hayes (Lab), Kevin Hollinrake (Con), Liz Kendall (Lab), Julian Knight (Con), David Mackintosh (Con), Mr Mark Prisk (Con), Mary Robinson (Con), Alison Thewliss (SNP)


Read the full report of the CLG Committee.


ARCH CEO John Bibby commented in response to the Report:


"ARCH welcomes the Committee's report and findings and fully supports the Committee's recommendation that the Government's extension of 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 councils and their tenants should be asked to reimburse housing associations for the cost of RTB discounts provided to housing association tenants.


In regard to the government's proposed mandatory  'pay to stay' scheme, ARCH also supports the Committee's recommendation that the suggested thresholds should be reviewed and would urge the Government to support stock retained councils being given the same local discretion as housing associations to adopt a 'pay to stay' scheme where it is considered appropriate to the local housing market.


ARCH would urge the government to carefully consider the findings and recommendations in the Committee's report and to amend the Housing & Planning Bill accordingly" 

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