Inside Housing | Pay to Stay meetings cancelled as policies face delays

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11 November 2016

Pay to Stay meetings cancelled as policies face delays

 

Meetings of the Government’s Pay to Stay working group have been cancelled as several key measures in the Housing and Planning Act look set to be delayed.

Inside Housing can exclusively reveal that the Government has cancelled scheduled meetings despite the policy- under which higher earning tenants pay up to market rent- originally being planned for implementation in April next year.

It is not clear why the meetings have been cancelled, but sector figures this week said it suggested a delay. Councils have been urging ministers to put the start date back to give them time to prepare.

The news emerged days after a senior civil servant admitted the Right to Buy (RTB) extension to housing association tenants is set to be delayed as a result of the Brexit vote.

Housing minister Gavin Barwell also said this week that councils “need plenty of time” before implementing the higher value asset levy intended to fund the RTB extension, in response to a question about whether councils would still have to pay the levy in 2017/18 as expected. The government said regulations to implement Pay to Stay and the levy, along with RTB guidance, will be published in ‘due course’.

The Pay to Stay policy requires council tenants to pay up to market rent if they earn over £31,000, or £40,000 in London.

The Government has already taken several steps that water down the effects of the policy. Inside Housing reported last month DCLG was considering exempting council tenants in areas where social rents and market rents are similar and councils will be able to decide how to define market rent locally.

The Higher Value Asset Levy councils would be forced to pay also faces delay. Housing bodies had expected the Levy to be introduced from April next year. However, housing minister Gavin Barwell told the Communities and Local Government committee this week that no implementation date had been decided. He added he is “very aware” the legislation was “quite controversial” and the government will need to give councils “plenty of time” to implement the policy.

The Levy regulations were due to be published before the parliamentary summer recess in July but still have not materialised four months later. Experts said it would now be difficult for the policy to be introduced from next April. Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

John Bibby, chief executive of the Association of Retained Council Housing, said if the voluntary RTB is delayed- as a civil servant this week said it would be – the higher value asset levy for councils should also be put back. He said ARCH would lobby “very strongly” for the levy to be delayed. He added: “If [the voluntary RTB] is not going to go ahead then there’s no reason to levy the councils.”

John Healey, shadow housing secretary said: “Ministers should recognise that on the Housing and Planning Act they may have won the legislation but they lost the argument. No-one thinks that forcing councils to sell off the best of their homes is an answer to the country’s affordable housing deficit. It can only make the problem worse.”

A DCLG spokesperson said nothing had changed with the higher value asset levy policy. He added: “We are currently considering how best to implement the policy to ensure it is robust and fair to councils. We will make an announcement in due course.”

Inside Housing | Housing minister casts doubt over Higher Value Asset Levy date

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08 November 2016

Housing minister casts doubt over higher value levy date

The levy is meant to fund the building of homes to replace those sold through the extension of Right to Buy to housing association tenants. The Government was widely expected to implement the policy from April next year but detailed regulations required to implement the measure have not been published. A Department for Communities and Local Government civil servant also admitted last week that the Right to Buy extension has been delayed by the Brexit referendum vote.

Speaking at a Communities and Local Government committee session this afternoon, Mr Barwell said the government has not made any decisions about when councils will be expected to make the payment but details of the “controversial policy” would require “quite a notice period” before being introduced.

He said: “We haven’t taken a decision on timing yet but we have a statutory duty to consult councils before making any determination setting out the payment that would be required and the regulations require affirmative procedure in the House so there’s clearly quite a big process that we have to go through before we could start making charges.”

Mr Betts pressed the housing minister whether councils will be expected to find any of the high value asset levy in their budgets for 2017/18.

Mr Barwell said: “In terms of the process we have to go through, consulting and taking affirmative regulations through the House, you can see there would be quite a notice period before we could start making those charges.”

Clive Betts, chair of the CLG committee, said most councils are setting their budgets for next year and “haven’t got any idea what figure is going to be placed on them to estimate the high value assets”.

Sajid Javid, communities secretary, said the government is “clearly very much aware that councils will need to know what the burdens are on them and that is something we don’t want to surprise any councils with”.

He added: “We want to give them fair notice what that will be. And as we progress and have more details we will share them.”

Mr Betts asked if the payment would be required at the beginning of a financial year. Mr Barwell said the Government wanted to make sure it is a “smooth process”.

He added he is “very aware” the legislation that went through the House was “quite controversial” and it will require time to allow people to comment on the detail of the regulations when they are published and give councils “plenty of time” to implement the policy.

The Housing and Planning Act, which received Royal Assent in May, gives the secretary of state the power to levy a charge on councils, based on estimates of higher value vacant stock.