Issue - meetings

To consider the attached report (CHB-008-2019/20).

That a follow-up report is received on an annual basis to understand the ongoing impact of the Right to Buy (RTB) on the Housing Revenue Account (HRA) and the steps being taken to mitigate this via the Council House Building Programme.

The Service Manager, Housing Management and Home Ownership presented a report the Cabinet Committee, she advised the report was an initial report, highlighting the impact of the Right to Buy (RTB) purchases on the Housing Revenue Account.

The number of properties purchased under the RTB since 1977 was 4876. This amounted to a loss of nearly 50% of EFDC Council Housing stock. Furthermore, the impact on the Housing Revenue Account in today's money amounts to approximately £25m per year. On average RTB completions are in the region of 30 per year. Since 2012 Councils have been able to use the RTB receipts to part fund street purchases or a building programme. EFDC has a house building programme, to date 108 properties have been built. The current build programme was based on delivery of a total of 370 properties to 2024.

The Council’s current programme will mitigate the RTB purchases, however this would only increase the Council’s stock by 0.7% year on year if continued at the current rate (2021 72 properties). However, RTB creates an ongoing risk to the HRA, and before agreeing the next programme the Cabinet Committee will need to consider whether the programme should seek to introduce a pipeline which will continue to increase overall housing stock.

To mitigate the loss of Right to Buy and increase our housing stock by 1% per year, the Council would need to have a council house building programme which delivers 90 units a year. The Local Plan was currently a barrier to this as there were no sites which were allocated for council house building. Furthermore, the opportunity to build on smaller sites was limited as the local plan had only a small number of 'windfall' sites (sites which were not allocated) which were permitted to proceed each year.

Moving forward, an annual report will give the context required to help Members understand the impact of the RTB and the number of new build properties needed if this Council chooses to mitigate the future losses to the HRA. 

Decision:

That the contents of this initial report be noted. That a follow-up report was received on an annual basis to understand the ongoing impact of the Right to Buy (RTB) on the Housing Revenue Account (HRA) and the steps being taken to mitigate this via the Council House Building Programme.

Reasons for the Decision:

Set out in its Terms of Reference, the Council House Building Cabinet Committee was to monitor and report to the Council on an annual basis progress and expenditure concerning the Council House Building Programme. It was suggested that this included the ongoing impact annually on the HRA from RTB, and mitigation by the ongoing Council Housing programme.

Other Options Considered and Rejected:

This report sets out the historical impact of RTB on the HRA, and the options to mitigate it going forward. There are no other options for action.