Council to return all Right to Buy receipts to government

Haringey Council says government restrictions on Right to Buy receipts prevent the authority from building replacement properties, so is planning to return all funds from the sales to government on a regular basis.

The council revealed to Liberal Democrat councillor Gail Engert that last month it already returned £14.8m of retained Right to Buy receipts from when discounts went up in 2012 up to the end of 2014/15 to the government, plus an interest charge of £980,000.

Under Right to Buy rules, councils must spend receipts within three years, or else be required to return them to government, with interest, to be allocated to housing schemes by the Homes and Communities Agency or the Greater London Authority.

The council says it will return to the government all further receipts “until we have a programme which gives us confidence of our ability to spend”. Receipts returned within the same quarter do not gather interest.

Ms Engert said the revelation was “very disappointing”. However Alan Strickland, cabinet member for housing and regeneration at Haringey Council, said: “Being forced to pay it back is something we do with an incredibly heavy heart but we simply can’t spent it.”

Councils are barred from using receipts to pay for more than 30% of a replacement Right to Buy home, meaning they have to stump up the remaining 70% themselves in order to fund a new property.

Haringey said this would mean investing £82.5m, but this outstrips its available headroom in its Housing Revenue Account.

Mr Strickland said the council tried giving the cash away to local housing associations, but that rules barring the mixing of government grant with Right to Buy receipts had dissuaded landlords from accepting the money.