Editor’s comment: Right to Buy rules leave councils stuck
- Credit: Archant
£7million sounds like quite a lot, right?
But little fanfare accompanied Islington’s decision to sign it off as the development of the Golden Lane Estate ran somewhat unapologetically over budget There was only a £3m gap in the finances, though, so where’s the remaining £4m going?
The problem is this £7m isn’t just “normal” council cash. It’s the receipts from Right to Buy sales, over which Islington has no control. It could sell half its housing stock in a year if people wanted to buy it; it could sell a single house.But it is income all the same. Good news for the town hall, right? A bit of much-needed cash to build some more homes and replace the ones being sold?
Oh dear - not even close.
The government requires councils to adhere to a range of arcane rules about how the money is spent. One is they can’t combine it with other grants, such as the GLA money committed to Golden Lane. So instead of supplementing the £4m from the GLA, Islington had to pay the entire £7m itself.
If you thought that was unfair, the council has to spend Right to Buy money on housing, but isn’t allowed to fund more than 30 per cent of a development with it, so it’s got to find 70pc of the cost elsewhere in the event it wants to actually build some of those homes 18,300 households are desperately waiting for.
Plus, it’s got three years to spend the money or it has to forfeit it to the government – the very people who made these ridiculous rules in the first place.
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It wasn’t a big decision to sign off the money, because, in a borough that desperately needs cash, it was essentially going spare. And that isn’t Islington’s fault for underspending or sitting on reserves or anything else you might have seen councils accused of recently. The fault, yet again, lies with Whitehall.