A London borough council is ready to fight the ‘forced’ sale of homes which could cost it £7.5m a year.
Under the Housing and Planning Act, Barnet Council could have to pay an annual Housing Revenue Account (HRA) levy – which the borough’s Labour councillors believe will cost that £7.5m a year – and see the enforced sale of higher value council properties to help subsidise Right to Buy for housing association tenants.
The borough’s Tory councillors, too, have agreed to oppose the forced sale of social housing, which the Labour group’s deputy leader Cllr Ross Houston has called a “u-turn” from previous stances.
Cllr 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.”
The Barnet Tories, however, say they have consistently opposed the forced sale of social housing and will continue to do so.
Cllr Tom Davey also said that a motion set out by Cllr Houston to lobby against the HRA levy was voted down because it also included asking the government to fund fire safety works after the tragedy at Grenfell Tower – which the leader of the council, Richard Cornelius, had already done.
He said: “My attitude towards the housing market is to keep as much stock as you can as the housing prices in London are only going to go one way – we’re happy to lobby against the HRA borrowing cap.”
The 2012 replacement of the national subsidy system for council housing with self-financing for councils saw Barnet move away from having to pay around £11m of council rents it collected to the Treasury – to a position whereby the HRA is self-sufficient and able to meet the on-going investment needs of council homes.
In addition, the settlement provided the council with the opportunity to borrow an additional £38m as a result of headroom generated by differences between the actual HRA debt and the amount assumed in the settlement.
The council has progressed a number of priorities to make use of the additional investment.
- Additional investment in existing council homes to maintain them to the Decent Homes Standard and also provide an accelerated programme of essential health and safety works
- Completion of 43 new council homes for rent on existing HRA land
- Investment in a new extra care scheme at Moreton Close which is currently on site, and a commitment to fund two further similar schemes · The acquisition of 21 properties for affordable rent across London
- A programme of advanced acquisitions on the council’s regeneration estates.
The 30-year HRA Business Plan has been updated to set out how the council will manage and maintain the housing stock and proprieties for investment going forward.
In addition, following the Grenfell disaster, the plan now includes options for implementing improvements to fire safety measures in the council’s housing stock.
The plan has taken into account the national policy of reducing existing council rents for each of the next two years, and the impact of the roll-out of Universal Credit in 2018.
A scenario is also included that shows the potential impact of proceeding with the sale of high value properties and payment of a levy to the Treasury, which featured in the Housing and Planning Act 2016 but has not yet been implemented by the government.
The council’s housing stock is managed and maintained by Barnet Homes, which completed the Decent Homes programme in 2011.
A 30-year asset management strategy has been developed by Barnet Homes to determine the future investment needs of the existing housing stock, including major works and health and safety related works.
Post-Grenfell, The HRA Business Plan sets out how the cost of fire safety improvements could be met through the HRA.
The council faces significant general fund budget pressures and the HRA provides some opportunities to help mitigate these pressures, particularly in terms of reducing the need to use expensive temporary accommodation by providing additional homes for rent for households facing homelessness.
The HRA also provides an opportunity to provide cheaper alternatives to expensive residential care for vulnerable people including older people and wheelchair users.
A number of other pieces of work will follow in order to implement the HRA Business Plan.
These include the building of build two extra care housing schemes and additional homes.
The council has said it will seek financial support from the government in meeting the additional costs associated with improvements to fire safety measures.
Barnet’s Joint Strategic Needs Assessment 2015 to 2020 highlights the fact that there is a long-term shift in housing tenure towards renting and away from owner occupancy – either outright or with a mortgage – reflecting a sustained reduction in housing affordability and an imbalance between housing demand and supply.