Agenda item

Review of the Use of Right to Buy Receipts and Appropriation of Land into the Housing Revenue Account

Decision:

(1) That the remaining land at Guildford Park car park be appropriated into the HRA with immediate effect.

(2) That the expenditure on the general fund capital programme relating to Guildford Park Car Park be transferred into the HRA following the appropriation.

(3) That no replacement car parking be delivered as part of the Bright Hill Scheme.

(4) That, once Secretary of State approval and an appropriate valuation is obtained, the allotments site (Plot 1) at Weyside Urban Village be appropriated into the HRA and that the Council commits to delivering Plot 1 at Weyside Urban Village as either a fully affordable or mixed tenure project within the Housing Investment Programme.

(5) That further consideration be given as to whether key sites within the Guildford Economic Regeneration should be appropriated into the HRA for Housing Development in due course.

(6) That the acquisition strategy, as set out in paragraphs 3.31 to 3.33 of the report, be approved.

(7) That a supplementary estimate of £2.2million, to be funded from HRA reserves, to increase the HRA acquisition budget to £7million for 2021-22 be approved, and that the supplementary estimate be moved straight onto the approved capital programme.

(8) That the HRA acquisition budget of £3million for 2021-22 be moved from the provisional to the approved capital programme.

(9) That the Major Projects Programme Board be re-invigorated in a revised form.

(10) That a Councillor/Officer Housing Working Group be established to monitor delivery of the Housing Investment Programme and to continue to develop the pipeline of projects.

(11) That a formal Use of Retained Right to Buy Receipts Policy be developed and brought forward for adoption by the Executive at a later meeting.

(12) That further legal advice be sought on the matter of whether granting RTB receipts to local housing associations, other local authorities (without a HRA) or other registered providers is a viable option for the Council and subject to that advice, officers be authorised to enter into discussions with local housing associations to ascertain if there would be a willingness to partner with the Council in this regard.

(13) That additional resources within the Housing Strategy and corporate Programmes team be approved to accelerate delivery of the Housing Investment Programme.

(14) That officers be requested to consider the logistics and viability of acquiring or developing housing outside of the borough boundary to increase its housing stock within the HRA.

Reason:

To facilitate the delivery of affordable housing in the borough and try to mitigate the risk of repaying RTB receipts to government in the future

Other options considered and rejected by the Executive:

To close the Bright Hill car park for redevelopment once the lease to the hospital expires.

Details of any conflict of interest declared by the lead or lead councillors and any dispensation granted:

None.

Minutes:

The ‘Right to Buy’ (RTB) was a Government scheme enabling eligible council and housing association tenants to buy their home at a discount. With the receipts received, the Council was required to build new social housing within a time limit of three years before the receipts had to be paid to government with interest. The government’s ambition was to have one-for-one replacement housing of properties sold under RTB.

The Council had not spent all of the RTB receipts on its new build housing investment programme within the required time frame in 2019-20. As a result, the Council had been required to repay to government a total of £2.7million. Although the Council had taken measures to mitigate some of the repayment risk there remained slippage on the Housing Investment Programme (HIP) which had continued into 2020-21. It was only possible to fund the HIP by up to one third by RTB receipts and the rest by HRA. The Lead Councillor for Resources had set up a working group to understand how and why RTB receipts needed to be repaid to government, the reporting arrangements around the matter and what could be done to prevent further repayments. The Council’s internal auditors KPMG had been asked to carry out an audit of the HRA capital monitoring and specifically the monitoring and use of RTB receipts.

The Executive considered a report setting out initial feedback from the findings of the new working group and a series of proposed measures intended to support the expenditure of the RTB receipts for 2020-21 and reducing the risk of repaying further receipts to Government.

Importantly, the context of the report changed with very recent announcements published in the Supplementary Information Sheet. On Friday 19 March 2021, the Secretary of State for Housing, Communities and Local Government announced the Government’s response to consultation resulting in a number of reforms for the use of RTB receipts which would have an immediate benefit to the Council and impact on the issues raised in the report. A summary of the key reforms was provided that changed many of the vital parameters under which the Council was operating in terms of RTB and would take effect from 1 April 2021.

The Lead Councillor for Resources emphasised although the announcements were immediately welcome and included additional time from three to five years to spend receipts, the slippage on the new build programme which mainly caused the repayment to government in 2019-20 had to be addressed. It was reported that the Council must ensure that it had sufficient new build projects coming forward in order spend its RTB receipts and to ensure that delivery of those schemes was properly planned and managed so that delays were minimised and repayment risks reduced.

The previous Housing Working Group would be revitalised with a new officer and councillor membership from Housing and Finance; there would be regular budgetary reports relating to the RTB receipts to the Corporate Governance and Standards Committee and explicitly in the budget outturn report to the Executive and other measures as set out in the recommendations. It was noted that the Weyside Urban Village, Guildford Park Car Park and Bright Hill Car Park sites coming forward as purely residential developments would offer the Council opportunities to utilise RTB receipts as was the potential development of North Street should progress be made towards greater mixed-use. It was noted that the planning application for Guildford Park Car Park was expected to be submitted in October and for Bright Hill early in 2022. It was agreed that the use of Bright Hill Car Park up until planning permission was awarded would be determined following the expiration of the Mount Alvernia Hospital lease.

As new homes were needed for Guildford residents, the Lead Councillor for Resources supported the continuation of the RTB scheme in Guildford, whilst noting that the greater the take up of the scheme the more pressure would be upon the Council to replace stock. It was proposed the Council could consider adopting a RTB receipts policy later in the year.

The Executive

RESOLVED: