ALMOs warn on adverse impact of measures in Housing and Planning Bill

Some policies in the Housing and Planning Bill will diminish the ability of local councils and their ALMOs to build new homes, the National Federation of ALMOs (NFA) has warned.

In a submission to the Public Bill Committee earlier this month, the NFA said the measures in question would also take away much of the local control and incentives within the self-financing system which had been responsible for the increase in council house building recently.

The federation maintained that it was fully supportive of the Government’s purpose and intent in the Bill to increase the number of homes built and it welcomed the commitment to try to do so.

It praised former Housing Minister Grant Shapps for completing the Housing Revenue Account (HRA) self-financing deal with local authorities which had allowed and encouraged a council house building renaissance and his successor, Brandon Lewis, for noting with pride the fact that in England council house building starts since 2010 were at a 23-year high.

“Unfortunately we believe that some of the clauses in this Bill, alongside other policy changes such as the 1% social rent cut in the Work and Welfare Reform Bill, will have the unintended consequence of cutting off this potentially significant and locally important life line of new build affordable homes for communities struggling to afford to save up a deposit for home ownership whilst living in high cost private rented housing or stuck in temporary accommodation waiting for a social letting,” the NFA’s submission said.

It warned that, with the Bill “very much an enabling Bill”, much of the detail would be left to regulation and the discretion of Secretaries of State. “We believe that the actual impact of the Bill will really be determined by the regulations which will not be subject to parliamentary scrutiny,” the federation warned, urging Parliament to discuss the issues now and consider its proposed amendments.

The NFA said the clauses in Part 4 of the Bill that it was most concerned about were in Chapter 2 Vacant High Value Local Authority Housing and Chapter 4 High Income Social Tenants: Mandatory Rents.

In relation to Chapter 2, the federation said the requirement to make a payment to the Secretary of State – to be calculated by reference to the market value of the high value vacant housing owned by the authority – was detrimental to councils’ ability to control their own resources and assets and make plans to build new homes in their areas.

“Chapter 2 in particular takes away local authorities’ control of their own assets, goes against the idea of localism and devolution and imposes control from the centre again after only a few years of true local control of council housing which has delivered some of the best use of assets and resources in the public sector,” it argued.

In relation to Chapter 4 the NFA said it believed that the proposed thresholds of £30k outside London and £40k inside London for defining “high income social tenants” were too low and would encompass households who were in receipt of benefit and/or receiving the minimum wage.

It warned that introducing a threshold which was lower than £60k outside of London and £74k inside of London would seem punitive and penalise aspiration as well as increase the dis-incentives to work or working more hours.

The federation meanwhile said the Government’s proposed social rent policy of cutting rents by 1% a year for the next 4 years would do nothing to improve the situation and would conversely help to drive up costs in the welfare bill if nothing else changed to increase the supply of affordable housing.

“The rent cuts are particularly problematic in the council housing sector as our members have already made efficiency savings and tailored capital investment programmes to fit a reduced projected income stream due to the stopping of the rent restructuring policy early and the change from using RPI in the social rent formula to using the lower CPI figure,” it added.

“We have therefore already proposed that councils are allowed to continue to make the decisions with their tenants on their own future rent policy.”