Housing and Planning Bill (Eleventh sitting)

Matthew Pennycook Excerpts

Tuesday 1st December 2015 Public Bill Committees

[Dr Blackman-Woods]

Labour Members think that clauses 62 to 72 contain some of the worst aspects of the Bill. We are certainly interested to hear from the Minister whether he thinks it is localist to insist that local authorities sell off their high-value council housing in order to pay for the right-to-buy scheme, which, as a number of Committee members will know, is seen out in the real world largely as the forced sale of council housing. We seek in this amendment and others to require the Government to ensure that no more demands than absolutely necessary are placed on local authorities to fund the right to buy.

We have many concerns about how such homes will be replaced, and about how the Government will estimate the income that they will require local authorities to pay. I wondered last year, when the Government produced a consultation paper on transparency in social housing assets value, what they had in mind. It seemed not a bad thing on the face of it to have some information about the value of assets in the social housing sector.

However, when the consultation paper was issued and when the Government published their response in November 2014, it was not immediately apparent what they had in mind, because a number of local authorities that responded said, “Yes, we think it’s a fairly good idea that we get some information about the value of our assets. We already do this partly,” or “We already do this sometimes, internally; why do the Government want us to do this so immediately—by April 2015—without giving us adequate time to put a proper valuation system in place? Indeed, why is it restricted to authorities that have a housing revenue account?” I could go on. As I said, people were not necessarily against having some say that would put a valuation on council stock, but it was not apparent to a lot of people who were responding to the consultation why that information would be needed in the way that it was requested by the Government or in the particular timeframe.

I raised that at the beginning because it means that, somewhere along the line, for one reason or another, the Government thought about the value of local authority stock and, perhaps, what it could be used for. It is interesting that a number of the comments that came forward eventually into the Conservative party manifesto said that, under the consultation—and, indeed, more widely—it was seeking to question the efficiency of the use of council stock. This high-value housing was being used to support and house poor families, which perhaps was not an efficient use of council housing stock. I am paraphrasing, and trying to describe the intention to the Committee. If Government Members want to correct me on that supposition, I am happy to take interventions, but outside that supposition I am not sure what is meant by “efficiency”.

What came forward from the Conservative party manifesto was that there would be a question about whether using high-value housing stock with a social rent attached to it to house people who were desperately in need of affordable social housing was the most efficient use. The Conservative view was that the housing could be sold off to fund a right to buy; that, regardless of whether it was going to be sold or not, a levy would then be attached to it; that local authorities, regardless of whether they were able, or wished, to sell the property and remove it from the housing stock, would have to do so; and that the estimate of income would be applied. That is one of the things we find most difficult about the clause. That is why we have tabled amendments that would limit the circumstances when it could be applied but would ensure that, in addition to the cost of selling the stock, there would be an indication that the stock would be replaced in a similar way and in a similar area, so as not to remove from the stock of housing available to local authorities much needed social rented property, which is vital to house the most vulnerable in our communities.

We know that, under clause 62, the Secretary of State may make a determination that requires local authorities to make payment to the Exchequer based on an estimate of how much high-value housing the local authority expects to become vacant in the upcoming financial year. That is what we are seeking to address with our amendment. We already know that the Minister has no definite information about the number of high-value housing units that will become vacant in the coming years. We know that because we do not know how much high-value housing there is. It is difficult to determine how much high-value housing will become vacant if we do not know how much high-value housing there is in the first place. We do not know a great deal about either of those things.

We do think that the numbers of vacant properties that come forward will be much more limited than the Minister has perhaps estimated. That means that payments to the Secretary of State may in fact be higher than the total grant paid in that year to private registered providers in respect of right-to-buy discounts.

[Matthew Pennycook (Greenwich and Woolwich) (Lab)]

I asked my local authority for an estimate of how many expensive council homes would become vacant each year, and the estimate that it gave me was 19. That puts the matter in context. If they are not available in a borough such as mine in inner London, in parts of which the land and house prices are rising very rapidly, it will be a case of being forced to fall back on a more direct levy on local authorities.

[Dr Blackman-Woods]

My hon. Friend makes a vital point and helps to emphasise what Opposition Members are saying, which is that we have grave concerns about how the estimate will work in practice. It could bear no relation to reality whatever. I would have thought that it was very important for the Minister to have a much clearer idea of the number of homes that will become vacant and the amount of money that will be attached to them. In fact, we seem to be hearing—my hon. Friend has just made this point very well—that the numbers of vacant properties coming forward that are deemed to be of high value, however that is to be determined, are in fact limited.

Savills, the property adviser, estimates that the Government are likely to raise only £3.2 billion a year from 5,500 council home sales. Savills says that that is well below the projection made by the Conservative party of £4.5 billion in receipts a year from 15,000 sales. As we can see, that is quite a discrepancy in terms not only of the numbers of homes that will become available under the clause, but of the amount of money that will be raised.

Amendment 157 is designed to ensure that local authorities do not lose out and, ultimately, to ensure that the powers given to the Secretary of State in clause 62 are not used as a power of general taxation. We feel that that might be the case if the estimate bears no relation to reality—a levy might simply be placed on local authorities that have council housing stock. We are deeply concerned about what the measure might mean, and not only in terms of loss of stock if local authorities do sell the homes. We think that, whether they decide to sell the homes or not, they will not raise the amount of money that the Government thinks they should and therefore that a levy will be applied to them. That could be instead of selling the homes, but it is more likely that it would be in addition to that.