Letting housing association tenants buy their homes at a discount will be disastrous for rural communities, according to a leading academic.
Government plans to extend the “right to buy” will make an existing housing shortage worse, said Professor Mark Shucksmith, Director of the Newcastle University Institute for Social Renewal.
And the problem will be particularly bad in rural areas – where house prices are highest, he said.
But the policy was welcomed by North East MP Anne-Marie Trevelyan, Conservative MP for Berwick, who said funds raised from the sell-off would be used to allow councils and housing associations to build more homes.
It comes as a senior civil servant criticised the policy, which was one of the Conservative Party’s flagship manifesto promises during the general election campaign.
The Government is to extend the right to buy their home at a discount, which currently applies to council tenants, to 1.3 million housing association tenants.
But Lord Kerslake, the former head of the civil service who was the most senior official at the Department of Communities and Local Government until February, has warned that the plan will do nothing to address the housing shortage.
He said: “I think it’s wrong in principle and wrong in practice, and it won’t help tackle the urgent need to build more housing and more affordable housing in this country.”
Under the Conservative plans, 1.3 million tenants in housing association homes in England will be able to buy their properties at discounts of £77,000, or up to £104,000 in London.
Ministers say housing associations will be compensated with money raised by forcing local authorities to sell off their most expensive housing stock as it becomes vacant, ensuring that the affordable properties which are sold are replaced.
However the proposals have been widely criticised by housing associations, with many threatening to sue the Government if they are forced to sell.
Prof Shucksmith said:
“There is already a shortage of affordable housing, especially in rural areas where there is little social housing.
“Rural house prices are on average 26 per cent higher than in urban areas, and the ratio of house prices to local earnings is even worse.
“Disposing of housing association stock, at great cost to the taxpayer, will make the impact on rural communities much more serious.
“We are already seeing those on low and medium incomes, and especially young people, priced out of small towns and villages across the UK. With housing association properties sold off, and unlikely to be replaced in any substantial quantities, the wealth divide in rural communities will deepen even further.”
And he said the policy would hurt employers, by driving the staff they need out of rural areas.
“With rural areas becoming increasingly socially exclusive, local businesses – from farms and shops to accountants and software developers – will find it even harder to attract the young, skilled, ambitious people they need.”
Source – Newcastle Evening Chronicle, 03 Jun 2015
Council chiefs and teaching unions have hit out after new figures revealed that the North East has slashed its local authority budgets more sharply than anywhere in England.
An analysis by the Chartered Institute of Public Finance and Accountancy found the amount spent on services in this region is forecast to decrease by 5% this year – more than double the amount in some other areas.
But the Government says it believes that residents are “happier than ever” with their council services – and if authorities want more money they should concentrate on collecting more council tax and make more of the empty properties they own.
> Hang on – the Government says it believes that residents are “happier than ever” with their council services.
Have I slipped into a parallel universe or something ? Or does the governmenmt spokesperson come from one ?
Much of the North East’s fall is due to a 10% reduction in spending on education, and a 9.3% drop in the budget for “environmental” services such as bin collections.
The figures also show the North East has seen a below average increase in the amount spent on children’s social care.
South Tyneside Council leader Iain Malcolm said: “The findings from Cipfa simply confirms what local authority leaders have been saying since 2010 – that local government is being asked to bear the brunt of the Government’s fiscal strategy for reducing the national deficit and that the North East is hit disproportionally harder than other areas in England.”
“Even with careful budgetary control, efficiency savings and finding new innovative ways to deliver our services, this inevitably means services do suffer.
“The Government claim they are devolving powers to local government and that their localism agenda is about giving local communities real choices in how services are funded – but its a sham.
“The real government agenda is a deliberate ploy to shift the blame for cuts in public services from themselves to local councils.”
Vince Allen, principal officer for the northern region at the National Union of Teachers said Cipfa’s findings were “extremely unwelcome” and that “its clear from the figures that education is going to take a considerable knock.”
“The amount available for community spending in the North East, particularly on education is slumping, in real terms, towards a level equivalent to that in 2005 – that’s how big a step backwards we are taking.
“But in the short term other than campaigning against the cuts that the Government are making I don’t know there is anything we can do to change this around.
“We just have to hope that a Government coming to power would not have the same agenda in terms of destroying local democracy and communities by continuing to centralise the money available for spending.”
> Dream on… I think most of us don’t expect an incoming Labour government to be anything but more of the same. All the main parties love austerity – not least because it doesn’t touch them personally.
Across the country the lowest average fall in spending is forecast in the North West, with budgets just 1.8% down.
Rob Whiteman, Cipfa’s chief executive said that to avoid councils experience serious financial trouble in the near future “we must recognise that some councils have been hit harder than others and will need more support.”
“We are now starting to see some councils face real and immediate financial pressures,” he said.
Steven Mason, lead executive director at Northumberland County Council said he hoped the analysis might encourage the Government to provide councils with more money in the future.
“Northumberland welcome the Cipfa analysis which supports the views put forward by a number of Councils including Northumberland and the Association of North East Councils.
“We hope the Department of Communities and Local Government considers the analysis by such a credible independent body with a view to more equitable future financial settlements across England.”
Source – Newcastle Journal, 09 Aug 2014