Barwell under pressure over £800m Right to Buy receipts kept by Treasury

The housing minister this week said Right to Buy is “only politically justifiable” if replacements are built, and pledged to “look at what we can do” to ensure this happens.

The government later confirmed to Inside Housing that £800m of the £3.5bn raised in sales receipts since discounts were increased in 2012 has been passed to the Treasury.

Meanwhile, a total of £1.5bn has gone to fund replacements with the remainder used to pay off historic council housing debts.

Councils called on Mr Barwell to address this, demanding that the Treasury’s share stays with town halls to help fund replacements.

A spokesperson for the Local Government Association said: “For [one-for-one replacements] to happen, councils need to be able to retain 100% of receipts from sales.”

John Bibby, chief executive of the Association of Retained Council Housing, added: “We would argue that councils who want to build should be allowed to retain 100% of capital receipts.”

Since 2012, 47,949 council homes have been sold under the Right to Buy, with just 9,460 replacements started.

The government has pledged to replace only the additional homes sold due to the increased discounts within three years, which to date only requires 6,389 replacements.

However, the target is set to rapidly increase in the coming quarters with the government set to slip behind by the end of this calendar year, and be more than 10,000 homes short by the end of the parliament.

Speaking to the Communities and Local Government Committee on Monday, Mr Barwell accepted the government will slip behind the pledge “at some point in the future”.  

John Healey, shadow secretary of state for housing, said: “The housing minister has admitted his own Right to Buy scheme is unjustifiable. The minster should… put councils’ money where his mouth is by giving them the financial freedom to replace homes sold.”

A spokesperson for the Department for Communities and Local Government said there is sufficient money to build replacements under the current arrangement and the Homes and Communities Agency would deliver if councils did not.