This is a letter to the Swindon Advertiser
Westminster’s robbery of ‘right to buy’ receipts
January 7, 2014
Obviously the coalition government thinks that there are not enough Council homes being sold off. They are raising the discount rate under their ‘right to buy’ scheme (RTB) for Council houses to 70%. They originally said that there would be a ‘one for one replacement’ of those homes sold off. This was always an empty promise. Last year there were 40 homes sold in Swindon, to the value of £3,735,000. With the discount the receipts were only £1,830,320. Yet when the government had finished robbing us of our money the Council ended up with only £450,000.
Rod Bluh was right when he complained about centralisation in Westminster under the cloak of ‘localism’. The government does not even allow us to spend these receipts as we see fit. It is imposing two conditions on their use. In order to be able to spend this puny amount the Council has to agree that only 30% of the cost of each house will be paid for by RTB receipts. So it would have to find 70% of the cost from its own resources or from borrowing. In order to be able to use the £450,000 they would have to find £1,050,000 extra. Tenants will pay for this from their rent.
On top of that the government has instituted a ban on Councils charging Council rents for homes built with the receipts. They have to charge so-called “affordable rent” (up to 80% of the private market rent). It’s difficult to imagine a more stupid policy. It will simply push up the level of housing benefits paid.
So not only do we lose desperately needed homes through RTB but any replacements built with the receipts would have to be at rents which are unaffordable for many people. Just to add a final sting in the tail, if the Council does not agree to these conditions, then the government will in effect confiscate the £450,000.
How you might wonder can central government tell us what to do with receipts from the sales of our homes? When the new Housing Finance system was introduced in April 2012 there was a ‘one-off debt settlement’ whereby the national housing debt was shared out amongst Councils that owned their housing stock. This was supposed to mean that Councils had ‘bought themselves out’ of the old system and they now owned their housing stock. How come the government takes the lion’s share of the receipts from these sales? Why do they take any money at all?
Swindon Tenants Campaign Group believes that RTB should be abandoned. With such a large shortage of Council housing we cannot afford to lose any. Whilst the government’s ‘bedroom tax’ is supposed to be freeing up larger family homes, its interesting to note that 30 of the 40 homes sold were 3 or 4 bedroom properties. So RTB is decreasing the amount of such homes available.
However, so long as RTB existsthen we believe that the town should be able to use the receipts as we see fit. Central government should have no say in the matter. Swindon Council should follow other Councils that have refused the government dictats in relation to receipts. Whilst it would be galling to see the government rob us of the money, we cannot afford to take on more debt to build homes with “affordable rent”rather than Council rents. However, we should press for an end to this robbery. Both Swindon Council and itsMP’s should be protesting at these impositions from Westminster and demanding the right for us to decide how to spend receipts from the sale of Swindon’scouncil housing stock. If the government wants to give power back to localities, why is it telling Councils that they have to do what Westminster decides?
Secretary, Swindon Tenants Campaign Group