Issue - meetings

To consider a joint report of the Corporate Director for Corporate and Support Services and the Service Director (Place Development).

 The report details proposals for the Council to enter into an agreement with Secretary of State to retain additional receipts for the provision of new housing stock in the borough. 

 On 12 March 2012, Ministers announced that the cap on Right to Buy (RTB) discounts would be raised to £75,000 and that receipts from the additional sales this would generate would be used to fund replacement stock on a one-for-one basis.  At the same time Ministers announced that their favoured option of delivering this replacement stock would be through local authorities retaining the additional receipts to spend in their areas.

The Comments of the Adults and Communities Scrutiny Committee on 23 July 2012 will be reported at the meeting.

 The Scrutiny Committee is invited to:-

·         Comment on the report; and,

·         Endorse Stockport entering into an agreement with the Secretary of State in order to utilise these potential receipts for the provision of new housing stock within the Borough. 

 Officer contact: Michael Cullen on 474 4631 or email: michael.cullen@stockport.gov.uk

A representative of the Service Director (Place Development) submitted a report (copies of which had been circulated) detailing proposals for the Council to enter into an agreement with Secretary of State to retain additional receipts for the provision of new housing stock in the borough.

It was reported that on 12 March 2012, Ministers had announced that the cap on Right to Buy discounts would be raised to £75,000 and that receipts from the additional sales this would generate would be used towards funding replacement stock on a one-for-one basis.  At the same time Ministers announced that their favoured option of delivering this replacement stock would be through local authorities retaining the additional receipts to spend in their areas.

It was reported that this item had been considered by the Adults and Communities Scrutiny Committee at its meeting on 23 July 2012 which had recommended that the Executive gave consideration to the concerns expressed by all members of the Scrutiny Committee and with particular regard to the impact of the proposals on the social rented housing stock in Stockport and the potential impact of the additional cost of land acquisition, should that be necessary.

The following comments were made/ issues raised:-

·         The changes to the Right to Buy Scheme gave further incentive to tenants to buy their home.

·         If Stockport did not enter into an agreement with the Secretary of State, the additional receipts raised through the sale of properties under the scheme would go to Homes and Communities Agency and would not be directly reinvested in Stockport.

·         The difference between the new build cost and the use of retained receipts up to 30% of the total amount invested in replacement stock would be funded by borrowing against future rent revenue.  Concern was expressed about the financial liability that would be incurred through funding new development through this model.

·         Any properties sold through the Right to Buy Scheme would be subject to clawback on a sliding scale over a five year period should they be resold.

·         The Executive needed to give full consideration to the financial implications of the revisions to the Right to Buy scheme.

MOVED AND SECONDED – That the Scrutiny Committee not endorse the proposal for Stockport to enter into an agreement with the Secretary of State in order to utilise these potential receipts for the provision of new housing stock within the Borough.

AMENDMENT MOVED AND SECONDED – That the comments of the Scrutiny Committee be forwarded to the Executive for its consideration.

AMENDMENT CARRIED

It was then

RESOLVED - That the comments of the Scrutiny Committee be forwarded to the Executive for its consideration.