Government rules on how councils spend their money prevented London boroughs from bidding for Sadiq Khan’s housing programme, councils have claimed.
Only six London councils bid for the mayor’s Affordable Homes Programme this year, an analysis of Department for Communities and Local Government and mayor of London data has revealed.
Most which did not bid said they were put off by the government’s restrictions on how they can use the cash they raise from selling homes to residents under the Right to Buy.
Fourteen councils bid for Boris Johnson’s equivalent programme in 2014, but the accumulation of more Right to Buy receipts since then has made it harder for councils to accommodate grant funding, which they are forbidden to combine with the receipts.
Mr Khan’s programme awarded councils a larger amount of funding, but a smaller proportion of the overall total went to local authorities.
Greenwich, for example, bid for the previous programme but not for this one. The council had £4.7m in Right to Buy receipts in the second quarter of 2014, when bidding for the programme was open. In the second quarter of 2016, however, it had £5.9m, a significant increase.
A spokesperson for Greenwich Council said: “The council has a large amount of Right to Buy receipts that it would draw on to support new social housing before applying for GLA funding. Government rules do not allow the use of both Right to Buy receipts and GLA funds on the same scheme.”
Islington Council receives one of the highest levels of income from Right to Buy in the capital, thanks to the high house prices in the area, and did not bid for Mr Khan’s or Mr Johnson’s programme.
Diarmaid Ward, Islington’s executive member for housing and development, told Inside Housing: “Unfortunately, the rules around Right to Buy are particularly onerous. You have to spend it within three years or give it back to the Treasury. You can’t combine it with any other grant money, so the way that we build social housing is we cross-subsidise. We sell some units privately to pay for it, and we use Right to Buy receipts.”
A spokesperson for the mayor of London said: “The mayor believes council-led development is essential to building more new and genuinely affordable homes for Londoners. This year he has awarded councils £142m from his affordable housing programme – more than double the amount in the previous mayor’s last allocations.”
Mr Khan has repeatedly called for the rules on Right to Buy receipts to be relaxed.