Report published 29 April 2016. Government response published 21 July 2016.
The Department for Communities and Local Government will be implementing its new policy of extending the Right to Buy. The statutory basis of this policy is to be established by the Housing and Planning Bill, currently before the House of Lords. Tenants of council housing have enjoyed a statutory right to buy their homes at a discount since 1980.
The new policy extends the right to buy at a discounted rate to all tenants of housing associations. Finance for this policy will come through an annual levy on local authorities, designed to be funded by sales of high-value council homes as these fall vacant. The Department has promised that housing associations will be compensated in full for the discounts on the properties they sell, and has committed that this policy will be cost-neutral to the Exchequer.
The policy commits to ensuring that a new home will be provided (either built or acquired) for each home sold by housing associations and local authorities, on an at least one-for-one basis within three years of the sale. These new homes are to be part-funded out of the sales of high-value council homes.
Department not clarifying details
The Department has not yet confirmed a number of details, for example, how much the Right to Buy discounts are projected to cost in total, the definition of a high-value council home, or the size of the levy on local authorities. The Department is currently overseeing pilots with five housing associations to help refine its understanding. In a recent report, the Communities and Local Government Select Committee criticised the Department for not clarifying these details at an earlier stage.
The Public Accounts Committee has made a number of relevant recommendations about the Department’s approach to appraising housing policies in the past that could help to safeguard value for money when the policy is being implementing. These include tracking where houses are built and when they are ready for people to move into (Disposal of public land), assessing alternative options to deliver a policy’s objective (Help to Buy) and assessing the impacts of increasing rents to up to 80% of market levels, both on lower-income tenants, and on the housing benefit bill (Affordable Homes).
The Committee will look at the issue of Right to Buy and may look to clarify how the Department has ensured its new policy fits with and complements existing housing policies. The Committee may also examine how the Department is using evidence to inform its policy making and Parliamentary scrutiny and identify how the Department is learning lessons from the implementation of other policies and the recommendations by the Committee.