In a written statement (HCWS 614) to Parliament
on the 29 March 2018, Housing Minister Dominic Raab announced that
the Government will consult with the sector on providing greater
flexibility around how local authorities can use their RTB (Right
to Buy) receipts, and how to ensure that the Government can
continue to support local authorities to build more council
In the statement the Minister also reaffirmed the Government's
commitment to the RTB and announced that the Government will be
rolling out a pilot of the RTB for Housing Association tenants in
the Midlands later this year although there was no mention of the
High Value Asset Levy.
The Minister's written statement was issued on the day that
Parliament rose for the Easter recess and followed quickly on the
publication of the latest Government statistics on the RTB which
show that the Government is failing on the promised one for one
replacement of council housing sold under the Re-invigorated RTB
introduced in 2012 under the Cameron Government.
Under the Government's one for one commitment made under the
Reinvigorated RTB local authorities have 3 years from the date of
the sale of each additional home to provide a replacement home but
can only use RTB receipts to a maximum of 30% of the cost of
providing a replacement.
The latest figures show that the Government is
currently falling short of its commitment to replace dwellings sold
under the Reinvigorated RTB by over 1,000 dwellings: There were
17,072 additional RTB sales between Quarter 1 2012/13 and Quarter 3
2014/15 but only 15,981 additional affordable housing units were
started or acquired by local authorities, Homes England and the
Greater London Authority between Quarter 1 2012/13 and Quarter 3
ARCH Chief Executive John Bibby comments:
"The Minister's promise to consult on greater flexibilities in
use of RTB receipts by local authorities is to be welcomed, but is
long overdue. ARCH has long campaigned for such flexibilities and
we set out a clear way forward in our list of asks submitted to Government prior to
last year's Autumn Budget when we said that to ensure any
council properties sold under the statutory Right to Buy are
replaced on a 1 for 1 basis the government should allow local
authorities more flexibility to make maximum use of the capital
receipts from RTB sales and urged the government to:
- Allow councils to retain 100% of the revenue raised from sales
to be reinvested locally in social rented housing.
- Give councils the freedom to use RTB receipts to meet more than
30% of the cost of building replacement homes, to combine RTB
receipts with grant funding, other capital receipts held in the
housing revenue account (HRA) or public land and to pass RTB
receipts to an arm's length management organisation (ALMO) or
another council owned company -provided the money is still
reinvested in new homes.
- Extend the cost floor ceiling, which prevents new council homes
from being sold at a loss, from 15 to 25 years.
- Extend the three-year time limit within which RTB receipts must
be committed to five years.
- Allow councils freedoms to reduce RTB discounts locally, where
they are able to demonstrate that they will otherwise have
insufficient receipts to enable them to replace homes sold and a
reduction in the discount would be unlikely to significantly impact
on the volume of sales.
If the Government is serious about consulting on greater
flexibilities on use of RTB receipts we will again make the case
for these changes. However the Government must go further and
recognise thatcontinuing uncertainty about the amount and timing of
any future HVA levy is a drag on investment in new housing through
the HRA, making it prohibitively risky for many councils to commit
to significant housing investment plans, whether in improvements to
the existing stock, or new building.
In responding to any consultation on use of RTB receipts we will
again call on government to make an early statement dropping plans
for introduction of a HVA levy and instead support more council
housebuilding by re-instating the principles of the 2012