Almost 2.5m homes could be sold off to the private sector resulting in the effective end of social housing in England
Last Friday, on the final day of the National Housing Federation (NHF) conference in Birmingham, Communities and Local government minister Greg Clark MP proposed a deal to make the extended Right to Buy for housing associations ‘voluntary’.
Housing associations have until Friday 2 October to vote for the proposal. Otherwise, the government will push on with its Housing Bill to force housing associations to implement the Right to Buy, which was part of the Tories’ May Manifesto. Avoiding legislation is highly desirable to the government since a potential backbench rebellion looms alongside the possibility of a lengthy battle in the House of Lords.
The attraction for housing associations if they accept the government’s deal, is avoiding the sword of Damocles the government has hung over their heads: being reclassified by the Office for National Statistics as public bodies, so adding £60bn onto the national debt; equivalent to more than the structural deficit Chancellor George Osborne has promised will be eliminated by 2019.
Such a reclassification will result in the effective nationalisation of charitable assets held in trust by housing associations, followed by likely privatisation and the UK’s largest ever public asset sale. Almost 2.5m homes could be sold off to the private sector resulting in the effective end of social housing in England. Only a small rump of council housing will remain, eroded over time.
The ‘voluntary’ nature of the deal, however, doesn’t enable housing associations to opt out. Rather, it intends that certain housing association homes – in high demand and rural areas for example – may be exempt. However, housing associations would have to offer alternative homes to buy through so-called ‘portable’ discounts.
Controversially, the extended Right to Buy would still be funded by the forced sale of high value council homes, so reducing the social housing stock still further. The brokering of the deal between the government and just the NHF has caused friction with local government bodies since it is their assets which will be sold to subsidise the scheme.
New shadow housing minister, John Healy MP, has already indicated that Labour favours a return to council house building as a more cost-effective way of dealing with the UK’s housing crisis, described by an independent economic assessment commissioned by the save social housing campaign, SHOUT.
Even if the deal is approved by the NHF’s 1,700 member associations, the government has given no guarantee that it would not legislate at a later date to make Right to Buy compulsory with the associated threat of nationalisation followed by privatisation.
NHF members have until 5pm this Friday to vote. In a strange twist to the deal, NHF member voting will be calculated by number of homes owned by individual housing associations. So it is likely that the top fifty associations, who own the majority of the housing stock will effectively decide the outcome of the ballot. There is a delicious irony here in that, as the Trade Union Bill wends its way through Westminster, the government is relying on a block vote to avoid what could be a lengthy Parliamentary battle.
Housing associations are understandably concerned that such an important decision is being rushed with many having to put in place emergency governance arrangements to decide on their voting intentions. It goes without saying that there won’t be time for tenants and communities, affected by the deal, to be consulted.
Despite assurances by government that there will be a one-for-one replacement of sold housing association homes, research into the rejuvenated Right to Buy in the council sector already reveals a replacement rate of just one in nine. The government’s clear intention is to see social housing either wither on the vine or be sold off in a privatisation that will dwarf the sale of the public utilities in the 1980s and 1990s.
Kevin Gulliver is a contributing editor to Left Foot Forward and a director of Birmingham-based research charity the Human City Institute and chair of the Centre for Community Research. He writes in a personal capacity
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