Wednesday, 18 January 2017

Councils could rely on developers for replacements

Councils could be forced to rely on private developers to replace high-value homes sold to fund the Right to Buy extension.

Baroness Susan Williams, parliamentary undersecretary at the Department for Communities and Local Government (DCLG), made the admission in a debate about the policy in the House of Lords on Thursday.

Under the plans in the Housing and Planning Bill, councils will be forced to sell high-value homes to pay for housing association tenantsRight to Buy discounts. The government has pledged money raised from sales will also be used to replace the council housing sold.

Pressed over what would happen if a council was left with no funds to replace homes due to the demand for Right to Buy homes, Baroness Williams said: “My Lords, in that sort of situation, I would imagine that the local authority has a number of options available to it, including the use of capital reserves, or indeed borrowing if it wished to.

“Alternatively, of course, private sector developers could build housing.”

The comments are the latest indication there might not be enough funding from the sale of council housing to fund both Right to Buy discounts and replacement council homes.

If the cash was exhausted by the Right to Buy, it is highly unlikely private sector builders would fund discounted rented housing without additional government grant. The council homes would therefore likely be replaced as straightforward market housing.

Baroness Williams also said the government plans to allow councils to enter into an agreement to keep funds to replace homes sold, in a similar arrangement to the existing council Right to Buy.

In the same debate, peers asked her to clarify how much money from the sale of council housing would go into replacing homes, and how much would fund Right to Buy discounts.

She said: “My Lords, that has not been set out yet… We are all fairly frustrated about this, I think it is fair to say. I have to keep telling noble Lords that I am not ready to give the details… I anticipate that it will be after Royal Assent.”

This provoked a furious response from opposition peers, with Labour’s Baroness Patricia Hollis saying: “We cannot make legislation on this basis where all the detail is in the ether, awaiting consultations that should have started last September. This is a travesty of House of Lords scrutiny.”

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