Even Theresa May has now been rolled out to defend the highly dodgy claim by environment ministers that council homes sold under the right to buy are being replaced. But it patently isn’t true.
There is no dispute that actual sales under RTB vastly exceed replacements: in the first four years of the ‘reinvigorated’ right to buy, sales reached 41,755 while local authority replacements only totalled 5,239. But the government claims relate to the ‘additional’ sales that have occurred, over and above what would have happened if the scheme had not been ‘reinvigorated’. In the four years to April 2012, sales averaged only 2,660 per year, so they deduct a figure (actually rather in excess of that) to allow for sales which would have happened anyway and aren’t covered by the promise. They also point out that councils have three years to start replacements, so to factor this in they allow themselves four years of starts and acquisitions to offset the first year’s sales.
So on this basis, the ‘additional’ sales in the first year were just 3,054 of the total of 5,944 actually sold, and these additional sales were offset by 5,239 council starts or acquisitions over the four years April 2012 – March 2016. So – hey presto! – the target was actually exceeded by 2,185.
The obvious problem with this curious logic is that accounting for the first year’s sales has gobbled up not only year 1 starts but those for years 2-4 as well. Which creates a slight problem when trying to account for the replacement of year 2 sales, especially as by that year (2013/14) sales had almost doubled, to 11,261. Even allowing for DCLG’s deduction of sales that would have taken place under the old scheme, 7,879 replacements still have to be found, and they have to come from a combination of the 2,185 ‘spare’ replacements from the previous year (5,239 minus 3,054) plus whatever is started or acquired in 2016/17.
Here’s where the logic starts to fall apart, because DCLG therefore ‘needs’ 5,694 starts or acquisitions in the current year (2016/17), to catch up with sales back in 2013/14.
We don’t yet have the first quarter’s figures for 2016/17 (they come out later this month). But it will be a minor miracle if they come anywhere near the DCLG’s target figure. The reason is that, far from growing, starts and acquisitions actually went down slightly in the last financial year compared with the year before (they rose to 1,953 in 2014/15, but fell to 1,852 in 2015/16). To achieve the DCLG target and allow them to claim that homes sold in 2014/15 had been replaced, output would need to more than triple in the current twelve months. Yet the LGA has already warned that councils are finding replacement more difficult to achieve, not less, which is why they have slowed down their replacement rate.
The problem does, of course, get even worse in subsequent years. By next year (2017/18) DCLG will ‘need’ another 8,512 starts or acquisitions (the ‘additional’ sales that took place in 2014/15), and a very similar number in the year after that. Barring miracles happening very soon, the ‘replacement’ promise, even under the very limited terms defined by DCLG, is a dead duck.
The National Audit Office warned that this would happen back in March. Since then, the numbers have changed slightly as extra starts and acquisitions have bolstered the earlier years’ figures. But the NAO’s basic conclusion remains valid, that DCLG are quickly going to need over 8,000 starts or acquisitions to be achieved by councils annually, or they won’t meet their target. NAO forecast a big shortfall, and there is little reason to question their conclusion six months later, even with the benefit of updated figures.
There are all sorts of reasons for this, not only to do with the rules about sales receipts but resulting from the government’s reneging on just about all the promises it made when council housing became self-financing. Coincidentally, the starting date for these promises was the same (April 1st 2012) as those about right to buy replacements. It’s proving to have been a fateful date in the history of council housing. How long do we have to wait until Theresa May realises she inherited a bunch of promises 4½ years ago that she can’t keep, and does something about them?