Extended Right to Buy could cost councils £6bn over four years
As the Conservative conference commences in Manchester today, the prime minister’s judgement in extending the Right to Buy to housing association tenants has been questioned by the Local Government Association (LGA).
The LGA, dominated by Conservative-led local authorities, claims that the extended Right to Buy, a core Tory manifesto pledge in May, will cost councils £6bn over the next four years, at a time of huge cuts in funding for local authorities across an array of service areas.
This follows on from housing associations, through their representative body the National Housing Federation (NHF), voting overwhelming last Friday to support a voluntary deal with the government. In the vote, reportedly 86 per cent of responding housing associations, representing 93 per cent of housing association homes through a block vote format, voted yes to the voluntary extension.
The LGA is concerned because, under the voluntary agreement, building replacement homes for those sold by housing associations to their tenants, will be funded by local authorities having to sell off their most expensive homes.
The LGA, as well as individual local authorities, are against the extension of the Right to Buy, since selling their homes will further deplete their social housing stock while driving up rents and the housing benefits bill. At the same time, local authorities’ capacity to build more homes and tackle bulging waiting lists and growing homelessness will be further curtailed.
Housing associations have voted for the deal largely to avoid being nationalised and then privatised if their reclassification by the Office for National Statistics as public bodies comes about as expected.
Critics of the deal between the NHF and the government have questioned its ‘voluntary’ nature, pointing out that the extension of the Right to Buy should have received parliamentary scrutiny. And its passage through parliament was far from guaranteed.
The government has also pledged one-for-one replacement of sold housing association homes. However, research reveals a likely replacement rate of just one in nine.
Coupled with the enforced sale of council homes to pay discounts to housing association tenants, a low replacement ratio will see the social housing sector overall – including both housing associations and councils – continue its decline since 1979.
The LGA has questioned whether the housing association affirmative vote signifies a move away from the provision of genuinely affordable homes for those in most need. Concern has been expressed that such an important decision about the future of the housing association sector has apparently been required to dovetail with the Conservative party conference. The extended Right to Buy is one of the five Tory ‘achievements’ emblazoned across the Manchester conference centre.
Many are also calling into question whether proper governance has accompanied the vote, given the tight timescales, or whether tenants and social housing communities, affected most by the deal, have been consulted.
It is likely that around 80-100,000 housing association tenants will exercise their Right to Buy during this parliament. Alongside sold council homes, this puts at risk the nation’s ability to confront a growing housing crisis as social and affordable housing takes a backseat to the seemingly endless veneration of home ownership as the ‘natural’ tenure of choice for the majority.
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 capacityLike 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.