UK news: Right to Buy extension plan ‘speculative and vague’
The UK government’s plan to extend Right to Buy discounts to 1.3 million housing association tenants in England has been described as “entirely speculative” by the Public Accounts Committee (PAC).
In a report which raises significant and pressing concerns about the plan, the committee concludes “many key policy details have not been clarified” and highlights continuing uncertainty around funding, replacement housing and abuse of the scheme.
According to the report: “The policy of extending Right to Buy discounts to tenants of housing associations, funded by the sale of high-value council housing, has potentially significant impacts for both local authorities and tenants of social housing, especially in areas where house prices are high.
“Despite the implications and complexity of this policy, the Department for Communities and Local Government (DCLG) has not published a detailed impact assessment to inform Parliament’s consideration of its legislative proposals.”
Last year, the DCLG announced its intention to give 1.3 million tenants of housing associations the chance to buy their home at Right to Buy levels of discount. A voluntary deal was agreed with the National Housing Federation to bring in the plan, which will see housing associations extend Right to Buy privileges to all their tenants and take the lead building properties to replace those that are sold off. In return, the government will fund the cost of the discounts, most likely by requiring ‘high value’ council properties be sold off.
Provision to implement this voluntary agreement is included in the Housing and Planning Bill 2015-16 due to return to the House of Commons next week.
However, the cross-party committee has taken the unusual step to examine the policy ahead of implementation, stating in its report that it was mindful of “both the potential impacts of the policy on a large number of individuals, and the significant amount of public money likely to be involved”.
Publishing its findings today, the PAC highlighted a lack of clarity around how the policy would be funded or what its wider financial impact would be.
It expressed concern that the government’s commitment to replace homes sold under the policy on at least a one-for-one basis “will not ensure that these will be like-for-like replacements” and that new homes “can be a different size and in a different area, and may cost more to rent”.
Increases in the value of discounts available under the policy “have increased the risk of abuse”, the committee added.
PAC chair Meg Hillier said the government should be “embarrassed” by the report’s findings.
She said: “Extending Right to Buy will affect many thousands of people yet the DCLG has failed to provide basic information to support its stated aims. Instead we have heard vague assertions about what it will accomplish and how.
“The approach to paying for this policy seems to be entirely speculative. On the basis of evidence heard by our committee, there are no costings or workings out. We are not talking about a ‘back of an envelope’ calculation—there is no envelope at all.
“Similarly scant regard appears to have been paid to the practical impact on social housing tenants, the long-term knock-on costs of the loss of social housing and potentially of a change in the mix of housing types.
“We can form our own views about the government’s motives for this but Parliament and the public are being asked to take a leap of faith about how this will stack up financially, and that is completely unacceptable.
“The DCLG has not made a diligent and credible case for this policy. The PAC follows the tax pound and so far all we have are assertions that it will be fiscally neutral.
“We urge the government to address the very serious concerns highlighted by our committee as a priority.”
A DCLG spokesman said: “This government makes no apology for helping people into homeownership. Our voluntary agreement with housing associations will mean 1.3 million tenants will have the chance to own their own home, while every home sold will be replaced with a new affordable property.
“We are currently working jointly with the housing association sector, and are running a pilot to assess the operation of the scheme and have always been clear we will set out further information.”
David Orr, chief executive at the National Housing Federation, added: “We are working with the government to deliver a Voluntary Right to Buy which is good for housing associations, their tenants and the nation’s housing supply. Along with the DCLG and our housing association members, we are drawing up robust plans to implement the voluntary Right to Buy agreement and deliver replacement homes for those sold which will be sensitive to local needs.
“Right now, we are working with our membership to ensure that we get the detail of the Voluntary Right to Buy right for our tenants and our members. That means we can work with the pilots, our local authority partners and others to design out problems like fraud from an early stage.”
Earlier this year a committee of MPs criticised the proposal’s “extremely questionable” funding model.