Brandon Lewis, the latest in a long list of short-lived housing ministers since 2010 has issued a press release on ‘right to buy’ sales. It is a classic example of using statistics to obscure the real situation. Mr Lewis, as with the previous housing ministers under the coalition government has a problem. The coalition spoke of ‘one for one’ replacement of homes sold under their new version of RTB with increased discounts. However, as we shall see, this did not mean replacement of all homes sold, as the term would seem to imply. Since the scheme was introduced in April 2012 there has been a significant gap between the numbers sold and the numbers replaced.
Like any dishonest propagandist you have to weigh Lewis’s words carefully. Take these.
“Today’s figures (25 June 1015) also show that 3,337 new starts and acquisitions have been made since the scheme was reinvigorated in 2012. This means that the additional homes sold in the first year of the scheme are already being replaced on a one for one basis nationally.”
Note the word ‘additional’. What does it mean? It doesn’t mean all the homes sold in 2012. In the first year of the new scheme there were 5,944 Council homes sold in England. So how could 3,337 ‘new starts and acquisitions’ mark a ‘one for one replacement’?
In fact the coalition government pulled a fast one. It never meant ‘one for one replacement’ of all homes sold under RTB. When questioned in January 2014 on the rate of replacement, the then Housing Minister Krys Hopkins,said:
“The one for one replacement policy applies to additional local authority sales – that is, sales above the level forecast before the changes were made – that have taken place since the reinvigoration of the right to buy in April 2012.”
Hence there never was any commitment to one for one replacement of all homes sold under RTB. When Brandon Lewis speaks of ‘additional’ sales, therefore, he is talking about the number of homes sold above the predicted level of sales before the ‘reinvigorated RTB’ was implemented. What Lewis is admitting is that the government is not committed to ‘one for one’ replacement of all Council homes sold though he’s trying to obscure the fact by the clever use of the word ‘additional’.
The actual DCLG consultation document prior to the ‘reinvigorated’ right to buy, was entitled “Reinvigorating the Right to Buy and one for one replacement”. The text explained that the amount of receipts that Councils could use for replacements was linked to the ‘debt settlement’ which was part of the new Council Housing Financial system, ‘self-financing’. This consultation document makes it clear that ‘one for one replacement’ would “provide sufficient additional funding to secure one for one replacement on additional sales”, that is sales over and above the numbers estimated in the government’s determination of how much ‘debt’ each local authority would be given; i.e. their portion of the supposed national housing debt.
To explain: local authorities had to draw up 30 year ‘business plans’ and these included an estimate of RTB sales each and every year. The assumption of the number of sales were based on the lower level of discount which pre-dated the ‘reinvigorated’ scheme. So the term ‘additional’ means the numbers above these estimates that are being sold since the increased discounts were introduced in April 2012.
What this means is that the government, even though it liked to give the impression that all homes sold under RTB, would be replaced, never made any such commitment. Under pressure it did admit that some Councils would not have the receipts to replace any homes, but said that ‘one for one replacement’ would take place on the national level. But only on the “additional” sales.
In practice this means that the government policy accepts, and indeed, promotes a decline in the numbers of Council housing stock. In addition, pun intended, those replacement homes built have to charge the ironically named, “affordable rent”, up to 80% of private sector rents. So the policy also drives down the number of ‘social rent’ homes that Councils own.
Even the ‘one for one’ replacement Lewis talks of requires a caveat. Obviously there is a delay between sales and the use of any receipts to build replacements, except where receipts are used to buy homes on the open market. Yet even Lewis’ dishonest ‘one for one’ measure is not entirely accurate. The words ‘being replaced’ merit attention because when you read the small print of the Department of Communities and Local Government Statistical Release on which Lewis’ press release is based you find that ‘new starts’ can mean preparation of the land but not of actual building work. So some of the homes ‘replaced’ do not as yet exist! We don’t have a figure for completions as yet, only for ‘starts’.
In the three years completed since the new RTB scheme was introduced 29,509 Council homes were sold. This puts the number of ‘replacements’ in context. Whilst Councils have three years during which they can use their RTB receipts to build or buy replacements, given the number of ‘starts and acquisitions’ so far it is clear that the number of Council homes will continue to decline. Indeed during the coalition government the number of Council homes in England fell by 116,845 from 2010 to 2014.
27th June 2015