industry news


Right to Buy extension delayed


The Government is delaying the roll-out of Right to Buy for housing association tenants until April 2018 at the earliest, with the enforced sale of higher-value council homes also delayed. Both measures were included within the


Housing & Planning Act 2016 but were causing badly souring relations between councils and housing associations. Council leaders complained they were being asset- stripped, in order to pay for sales discounts to HA tenants. In a major climb down from the Act’s


policies, Housing Minister Gavin Barwell, has written to councils advising them the Government will not be requesting any high-value asset payments during 2017/18. In the run up to the Autumn Statement, local authorities called for the policy to be delayed from its expected start date of April 2017 on the grounds it was unfair and being rushed.


Portability


Barwell also confirmed the extension of the voluntary pilot of Right to Buy sales to HA tenants will test one-for-one replacements and the ability to move discounts, unlike in the current pilot.


“Demonstrating that one-for- one replacement works as part of this regional pilot is really important, before we proceed to national roll-out” – Gavin Barwell


The minister said the housing sector


should not assume the national roll-out will not take place until after the five-year regional pilot has come to an end. He reiterated that extending the Right to Buy to HA tenants remained a manifesto commitment. The Housing Minister said while the


Government was “very grateful” to the associations involved in piloting Right to Buy sales, the scheme has been relatively small scale and further work was needed on moving discounts to properties other than tenants existing homes. Gavin Barwell added: “I’m very conscious


that Right to Buy is a policy that doesn’t have universal agreement and to me the key to making it acceptable is that it should both help people fulfil their dream of owning their own home but also deliver a replacement affordable home for rent – therefore demonstrating that one-for-one replacement works as part of this regional pilot is really important, before we proceed to national roll-out.”


HCA faces mixed reaction after launching regulation fees consultation


Government cutbacks. The Homes and Communities Agency (HCA)


S


has opened a statutory consultation exercise over introducing a fee-charging scheme for the regulation of social housing providers. But with implementation of a new scheme expected from April 2017, the associations’ trade body has labelled the charges unfair. The National Housing Federation has


criticised the proposal and also warned that the introduction of regulatory fees would reduce associations’ capacity to build homes. John Bryant, policy officer at the NHF,


commented: “The housing association sector operates on a non-profit basis. It should not be subject to the same regulation as profit- making sectors like finance or utilities. “The introduction of fees will simply take


away from housing associations’ the capacity to build and provide other services of public benefit.” Mr Bryant also said that bringing fees in this year “should be out of the question” as there would not be enough time for associations to prepare.


£5 a home


The fees issue has been knocking around for some time, with the powers included in the Housing and Regeneration Act 2008, a discussion paper launched in 2014, and politicians raising the matter periodically. The latest statutory consultation sets out the anticipated fee charges as follows:


• An annual fee of £5 per unit for all registered providers with 1,000 or more social housing properties


• A fixed fee of £300 for providers with fewer than 1,000 social housing properties


• A one-off fixed rate fee of £2,500 for successful new registrations with the regulator


This would see a medium sized landlord with 8,000 homes pay £40,000 a year, while a larger landlord with 50,000 homes will have to pay a sizeable charge of a quarter of a million pounds. Consultation closed on the 9th January 2017. In total, the HCA expects to raise fee income


totalling £12.5m in 2017/18, as its grant income from the DCLG for regulatory work shrinks to just £2.5m – which represents just one sixth of its overall regulatory budget.


Contrasting views


While many HA chiefs have acknowledged the inevitable introduction of fees and the benefits they derive from regulation, a growing number have questioned the flat rate charging method being proposed. Some of also raised issues of transparency, accountability and value for money, which


ocial landlords face the prospect of having to pay millions in fees to keep its regulator afloat amid further


suggests the regulator might find itself coming under greater scrutiny. Bruce Moore, chief executive at Housing


and Care21 said: “If you are a steady, stable organization, you will pay more than a smaller one doing bizarre things. It seems to be based on numbers of social housing units when the risk comes from the speculative stuff.” Meanwhile leaders of smaller providers complained they were being forced to pay for menial regulatory engagement and assurance. Depending on the outcome of the statutory


consultation, fees are likely to be introduced in April 2017. If this occurs, the regulator plans to confirm final proposals and the relevant fee amount for each landlord body by early 2017. It has been stated the money is required


to pay for the enhanced regulatory systems, processes and exercises brought in following upheaval in the financial and construction sectors. But the HCA has also found it’s


own budget for regulatory activities more than halved by the Government as part of public spending cutbacks, with further savings targeted.


Benefits


Speaking at the Social Housing annual conference, Julian Ashby, Chair of the HCA Regulation Committee, described the fees as “cheap at the price” due to the financial benefits the sector receives from regulation, in reduced borrowing costs and access to funds.


“The proposal could see landlords with 8,000 homes pay £40,000 a year, while 50,000-home landlords will face a charge of £250,000”


Charging fees would enable the regulator to


ensure that it maintains the capacity and capability to promote a viable, efficient and well-governed social housing sector able to deliver homes that meet a range of needs. Ashby added: “With more complexity and


risk in the sector it is essential that we maintain the right level of skills and capacity to deliver effective regulation into the future. The fees proposals will help ensure that the regulator remains adequately resourced to do this.” As with most regulated sectors, in the


context of wider reductions in public spending it is reasonable to ask providers to contribute towards the cost of regulation given the benefits including lower borrowing costs. It is proposed that some elements of


regulation such as enforcement action and unsuccessful registration applications will continue to be funded by the Government.


www.housingmmonline.co.uk | HMM January 2017 | 7


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