Plans by the Government to extend the Right to Buy scheme could effectively strip local authorities of their assets and drive a wedge between councils and the housing association sector, public finance experts warned today (5 October).
The Chartered Institute of Public Finance and Accountancy (CIPFA) said that extending Right to Buy would only deepen the country’s housing crisis and result in less social housing being built.
CIPFA’s warning comes as housing associations accepted a deal that allows them to voluntarily enter into Right to Buy without the need for legislation.
In a report examining the impact of extending Right to Buy, CIPFA said that as local authorities would have to sell high value authority housing to pay for the scheme it would greatly reduce their ability to retain local social housing provision.
This problem would only intensify unless the Government guarantees at least one for one replacement for every house sold in the areas of highest need.
But current evidence suggests that the record of one for one replacement homes has not lived up to expectations. In 2013/14 11,261 properties were sold under Right to Buy compared with 961 started on site or acquired in the same year.
Rob Whiteman, Chief Executive of CIPFA, said:
'Extending Right to Buy, without proper consultation with the public bodies which will foot the bill for it, is effectively stripping local communities of their most valuable assets in order to subsidise discounted sales elsewhere.
'It is unfortunate that the Secretary of State's proposals have been formulated without any obvious negotiation between the two sectors. We believe it could well drive a wedge between housing associations and local authorities at a time when they should be working more closely together.
'The Local Government Association’s recent review into the scheme has also reinforced our fears about its damaging effects for local authorities as it is clear that it is unsustainable.
'Social housing is vital in helping to maintain vibrant balanced communities but with less of it available there could be a serious impact on the ability of businesses and public services to recruit and retain key workers locally in areas of high cost housing.'
A copy of the report Housing Associations: Right to Buy is available online.
For media enquiries contact the CIPFA press office on 020 7543 5830/ 5787 / 5675 or email Saskia.email@example.com
CIPFA’s report (Housing Associations: Right to Buy) also highlighted how: