DCLG bars release of Right to Buy analysis

http://www.insidehousing.co.uk/policy/politics/central-government/dclg-bars-release-of-right-to-buy-analysis/7009748.article

DCLG bars release of Right to Buy analysis

14 May 2015 | By Pete Apps

Civil servants have blocked the release of a secret document detailing the economic consequences of extending the Right to Buy to housing association tenants.

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The Department for Communities and Local Government (DCLG) carried out financial modelling of the policy – which is a Conservative Party manifestopledge – before last Thursday’s general election.

The document, which DCLG has confirmed exists, is understood to spell out the high financial cost of the policy should it go ahead.

Inside Housing requested the document under the Freedom of Information Act but DCLG has declined to release it. The department said: ‘The analysis requested relates to a live policy in the sense that its development and impact are still being reviewed.’ It said ministers need ‘private space’ to evaluate the policy. Inside Housing has appealed the decision.

Tony Stacey, chair of the Placeshapers group and chief executive of South Yorkshire Housing Association, said: ‘This information should be in the public domain, once new ministers have had a chance to look through it.’

The refusal comes as ministers and civil servants over the next few weeks will be grappling with the problem of delivering the policy in the face of a number of obstacles.

David Cameron has previously said he wants to introduce legislation on the Right to Buy extension within 100 days of the new government and it is expected to feature in the Queen’s Speech on 27 May.

Concerns have been raised about the feasibility of forcing private, charitable housing associations to sell off assets without breaking charity law or forcing a reclassification of providers’ status as public. This would likely lead to their £60bn of debt being put on the public balance sheet.

One figure in parliament said: ‘It is near impossible for the government to implement this in the form that has been suggested.’

Housing associations are instead hopeful that the government will find a way of achieving its aim of extending home ownership to more social tenants without forcing associations to sell their stock, perhaps through incentives to voluntarily participate as part of a larger package of flexibilities over assets.

Moody’s last week became the third credit rating agency to warn about the impact of the Right to Buy. The rating agency said Right to Buy sales, while providing short-term cash flow, could ‘erode long-term rental income streams and potentially impair… balance sheets.’ Similar warnings were issued byFitch and Standard & Poor’s last month.

Brandon Lewis, housing minister, said the receipts from homes sold will release funds for development.

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