Forced sale of council homes could cost Barnet £7.5m a year

A Tory Government dictat will force local authorities to sell higher value council homes to help subsidise the Right to Buy for housing association tenants. This could cost Barnet council £7.5 million a year according to figures presented to this week's Housing Committee (23 October). 

The committee report also stated that "this suggests that the Housing Revenue Account would become unsustainable from 2041 onwards if applied to the baseline model."

The Housing and Planning Act 2016 will require Barnet council to pay this annual HRA levy to the Government, but Labour councillors believe that the policy is unfair and should be ditched. They secured a major u-turn from Conservative councillors on the Housing Committee who voted for Labour's motion to oppose the forced sale of council homes, and lobby the Government to abandon the policy.

Labour councillors also got agreement that Barnet council will lobby against Government imposed borrowing restrictions for housing investment - another u-turn from the Barnet Tories who voted against Labour's motion on this at the July Council meeting.

Labour councillors also called for continued pressure to ensure the Government does not renege on its commitment to fund essential fire safety works in council tower blocks, which will cost at least £17.5 million. The Barnet Tories agreed to circulate the Government's response when it is received.

Labour's Housing Spokesperson and Labour Group Deputy Leader, Cllr Ross Houston said:

"The Barnet Tories have finally caved in and accepted that there is a housing crisis, and that the Government's housing policy is a disaster area that will make things worse.

“The forced sale of higher value council homes will mean there are even fewer council homes for Barnet's residents, and a massive bill of £7.5m to be footed by Barnet's council tax payers every year.

"This is pure madness at a time when we need more council homes and when we have less money.

“Instead of the forced selling off our housing stock we should be investing to build more council homes that Barnet residents desperately need. Lifting the borrowing cap on housing investment would help us do that, but until now the Barnet Tories have opposed this.

"We hope they will perform further u-turns on licensing private landlords, and ensuring social homes for rent are not scrapped on regeneration estates like Grahame Park."

Ends.

Notes:

1. A link to the Housing Committee agenda and reports can be found here: http://barnet.moderngov.co.uk/ieListDocuments.aspx?CId=699&MId=9237&Ver=4

2.    Extract on the forced council homes sale levy in the Housing Revenue Account business plan report follows (pg 7 Agenda Item 11):

"A third scenario shows the potential impact of requiring the Council to sell higher value properties and pay a levy to the Government. Although there has been a delay in the issuing of regulations which will provide more detail of the payments that each local authority will be required to make, analysis carried out by Shelter in September 2015 suggested that based on information that the Conservative Party published during the 2015 general election, Barnet would need to raise £7.5m a year, based on the sale of 15 higher value council homes becoming empty. This suggests that the HRA would become unsustainable from 2041 onwards if applied to the baseline model."

http://barnet.moderngov.co.uk/documents/s42699/Housing%20Revenue%20Account%20HRA%20Business%20Plan%20App%201.pdf

3. A copy of the Labour motion to the July Council meeting:

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