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Government mouth pieces defending the indefensible – in my humble opinion. The most senior of them conveniently sidesteps a key question from MPs, ‘If you sell a house at a discount, how do you buy another one to replace it?’. Answer, ‘Spend what money you do get, fixing up the houses you’ve already got’. That’s helpful isn’t it.
The MJ online By Martin Ford | 22 January 2019
A top Marsham Street official has defended the Government’s Right to Buy policy as ‘good value for money’ following demands for its abolition.
The scheme came under fire from MPs and the London Assembly this week, when it was accused of undermining councils’ efforts to build social housing and sapping funds.
At yesterday’s meeting of the Housing, Communities and Local Government Committee, Labour MP Liz Twist said: ‘How can you expect councils to invest in new social housing if they have to sell the house at a discount under Right to Buy?
‘It seems a bit strange we are wanting councils to build and yet they are having to sell these houses at a discount down the line.
‘It doesn’t seem to make financial sense.’
Permanent secretary at the Ministry of Housing, Communities and Local Government (MHCLG), Melanie Dawes, said: ‘What we get in terms of economic benefits is that housing associations have receipts they are able to build with so we get the usual benefits from new housing supply.
‘We also get distributional benefits because generally we are talking about lower-income families who are able to buy who otherwise wouldn’t be able to.’
Highlighting London Assembly research published that found 42% of Right to Buy homes sold in the capital are now in the private rented sector, committee chair Clive Betts said: ‘It’s unfortunate many of them end up as buy-to-let properties.’
The London Assembly research by member Tom Copley also found the capital’s boroughs spend £22m each year renting back right-to-buy properties.
Mr Copley said: ‘Something has gone very wrong when tens of thousands of homes built to be let at social rents for the public good are now being rented out at market rates for private profit, sometimes back to the very councils that were forced to sell them.
‘Right to Buy is failing London and should be abolished.’
Cllr Darren Rodwell, London Councils’ executive member for housing, said: ‘These figures reveal the immense costs and inefficiencies caused by misguided policy at a national level and, with boroughs enduring a 63% cut in core funding since 2010, it’s clear we can’t carry on like this.
‘The Government should end its restrictions on the use of Right to Buy receipts so that all money raised from council house sales in London goes back into building more homes.’
MHCLG director general, Jeremy Pocklington, told the select committee: ‘We think it is good value for money.
‘The case for Right to Buy is it helps people into home ownership that would not otherwise be able afford their own home, which is something this Government strongly supports.
‘It does release resources that councils can use to invest in their stock.
‘While homes are being sold – which is enabling people who would not otherwise be able to own their own home – a great many more homes are being built through all the interventions, looked at in the round.’
When total funding is calculated per head, English councils are once again worse off.
“What these figures show is that when there is real power over public spending choices outside of Whitehall, it makes a difference” Jo Miller, Solace president
In 2018-19 English councils are receiving, on average, £1,423 to spend on services per person. This is more than a third lower than what their counterparts in Wales and Scotland are given to spend per person this year – £2,309 and £2,237 respectively.
While the amount of per capita funding made available to councils in Wales and Scotland has increased by 5.2% and 0.2% respectively in absolute terms since 2010-11, England has witnessed a 29.8% reduction in the last eight years.
Commenting on the findings, Jo Miller, president of the Society of Local Authority Chief Executives & Senior Managers, who writes on the issue for LGC today, said: “What these figures show is that when there is real power over public spending choices outside of Whitehall, it makes a difference. With a comprehensive spending review on the horizon, and the need for a preserved union of Great Britain and Northern Ireland post Brexit, the case for genuine devolution within England grows ever stronger.”
Both the Treasury and the Ministry of Housing, Communities & Local Government declined to comment on the findings.
However, in his Budget speech last month chancellor Philip Hammond said English local government had “made a significant contribution to repairing the public finances”. He pointed to £1bn extra funding for social care, and the removal of the housing borrowing cap, as proof the government was giving councils “more resources to deliver high quality public services.”
Mr Hammond also said “longer-term funding decisions [for English councils] will be made at the spending review.”
In an interview with LGC, local government minister Rishi Sunak said he did not recognise the national disparities highlighted by our analysis but added “we have a devolved country so whatever Scotland and Wales want to prioritise is up to them. It’s not for me to tell them what to do.”
Mr Sunak said that while he preferred to “focus on outcomes, not necessarily just inputs”, the extra money in the Budget amounted to a “pretty serious statement of intent”.
A Welsh Government spokeswoman said its councils had been “protected from the worst effects” of austerity. She added: “We value local government services in Wales and believe in strong local government. We recognise their importance, particularly for some of the most vulnerable in our society, and the role these services play in enabling people to achieve their potential and to live independently, in supporting safe and prosperous communities and in building local economies.”
A spokesman for the Scottish Government said: “We have treated local government very fairly despite the cuts to the Scottish budget from the UK government.”
It’s probably a bit late to ask this question, given that this scheme has been in place for 30 years now.
That said, the proof must already be there, especially in London where working class areas, that were a foreign land for those with means, are now fashionable and sort after locations for the young professionals, earning big money.
Exposing social housing to the open market , in high demand areas, where demand is the through roof and prices constantly rising, inevitably means the original tenant, very soon becomes the ex-owner.
It might seem like a a very worthy ambition, giving everybody currently sitting at the bottom of the pile and trapped in social housing – as certain people view it – a chance to own their own home. However, assuming that hat was even the original intention and it wasn’t just about killing off the bulk of social housing as we knew it, it’s also had the effect of depopulating our city centre of those of modest means, otherwise known as the working classes.
So all those people who used to empty the bins, sweep the streets, dig up the roads, drive the delivery van, serve in the local shops and do the thousand and one other menial, but vital jobs that keep a city running, now live a journey away from their workplace.
in some cases that journey may mean up to an hour spent on a bus, or train, travelling in from a remote housing estate where everybody else is doing exactly the same thing. The effect of this, is that nobody actually knows who their neighbours are anymore and therefore certainly little, or no sense of community, because there’s so little actual time spent in the company of those who live near us.
Back in what used to be the social housing areas that haven’t been flattened and turned into expensive apartment blocks for the upwardly mobile, the housing has been gutted, extended and beautified, to make it desirable and more importantly, significantly more expensive than it was. Again, just like the workers they displaced, the lack of community will be clear, but this will be by choice in most cases, because their social lives take them elsewhere and opportunities more diverse.
Job done. All those rundown, poorly maintained sink estates cleared out from our city centres And that ‘unpleasant’ working class riff raff removed to where it belongs, when it not actually doing the work that needs doing.
The added bonus is, those who grabbed the social housing as soon as the first tenants where starting to sell, can now maximise their returns, over and over again, by renting to the high earners who need to live close to the city centres.
If Right to Buy was really about getting those of modest means on to the housing ladder, it was a fatally flawed concept. It depopulated our cities of the ordinary working class people, by selling off the only type of housing they could ever have afforded to live in. If that was always the intention, shame on you Margret Thatcher.
The Housing should have been retained and those who wanted to buy their own property should have offered equivalent grant funding to purchase their own home elsewhere. This could have been in a privately built, or publically funding housing developement, such as in the new towns.
It was claimed that this would have forced people to move out of houses, or places they’d been in for many years and possibly spent money on. This is complete nonsense and just a smoke screen used by government to justify to the orignal scheme.
Why should social housing tenants have been given that benefit on top of the massive discounts they received for the ‘equity’ they’d supposedly built up? How was they were any more entitle than somebody forced to rent a property in the private sector, where the end of lease meant the most you were likely to get back was your deposit if you were lucky?