Profits from Right to Buy have been put into the 'general pot' of the Treasury
Tom Copley, the housing spokesperson for the Labour London Assembly, has accused the government of ‘stealing’ over £90m of funding for new council homes in the capital.
In November, Copley wrote a letter to Danny Alexander MP asking him to explain how capital from Right to Buy had been spent. Housing minister Brandon Lewis replied in March, admitting that between 2012 and 2014 the Treasury had diverted over £90m of Right to Buy income from London boroughs to other projects.
Lewis said that the money had been put into the ‘general pot’ of treasury finding and that it was ‘not possible to set out specifically’ how the proceeds were spent.
Copley said the money should have been used to fund new homes in the capital, and accused the government of intentionally cutting the number of council homes in London. He wrote:
“Given the scale of need for new social housing in London, as well as the predictions of London councils who believe they will sell more homes then they will build in coming years, I ask that you return the £90m top slice so that councils have the best chance possible to replenishing their social housing stock.”
The last government promised that every ‘home sold under Right to Buy will be replaced by a new home for affordable rent, with receipts from sales recycled towards the cost of replacements’.
But a recent report from Tom Copley found that councils in London expect the number of homes sold under Right to Buy to far outstrip the rate they are able to build replacements over the next decade.
Overall, London boroughs expect 1.5 council properties to be sold over the next ten years for every new home that will be built. Outer London boroughs predict that two council homes would be sold for every new home completed.
Government data shows that between 2012 and 2014, 4,017 council homes were sold in London, but only 540 completed. Over the same period, 1,530 council homes have been started , which is less than 40 per cent of the number sold.
Tom Copley today questioned whether reducing the number of council homes in London was a deliberate policy:
“Despite promising that Right to Buy would result in a new home for each one sold the last Government effectively stole £90m which was meant to be spent on new homes for the capital. As a result many councils are finding it impossible to replace their lost homes.
“London’s housing market is already in crisis, diverting money which was meant to be reinvested in new homes is a total betrayal. You have to wonder whether the policy was intentionally designed this way to reduce the number of council homes in London.”
Ruby Stockham is a staff writer at Left Foot Forward. Follow her on TwitterLike this article? Sign up to Left Foot Forward's weekday email for the latest progressive news and comment - and support campaigning journalism by making a donation today.