The simple change to government budgeting rules that could solve the housing problem

In 1980 the Conservative government introduced the right to buy council houses.  The rules were that half the proceeds of the sales were paid to the local authorities, but they were restricted to spending the money to reduce their debt until it was cleared. They were not allowed to spend it on building more homes. The houses sold at up to 50% discount and so only a fraction of the sale price went to the local authority at best.

The arrangement effectively put an end to the building of new council housing.

Today, the shortage of housing available to local authorities means that many people in need of housing are not helped at all (too low on the priority list), and others are put in expensive emergency private sector accommodation.   The cost to the nation is appalling.

There is a clear local authority business case for providing council housing – it generates income that will more than cover the costs.  Capital could be borrowed to finance construction, generating more revenues and reducing the need for such drastic cuts in other services to balance budgets.

But why would a local authority borrow millions to buy or construct new council housing when there is a high chance that in a few years the tenant will buy it at a discount and the sale revenues will go straight to central government?  The business case is destroyed at a stroke!

A simple change that allows all the proceeds of a ‘right to buy’ sale to be retained by the local authority would turn the business case around and initiate the essential program of building new social housing, solving the housing problem and generating extra revenue for local authorities.

Why has this change not already happened?  I can only think that it is the Conservative ideology of private ownership that prevents this simple change.  Without new council housing stock, tenants are forced to rent from private landlords with high rents set by supply and demand – exacerbated by the housing shortage.

The people of this country are better than this.  If this government won’t change then we need a change of government.

If you agree then please sign this petition:

About Minimalist Christian

Phil Hemsley is a graduate of the University of Cambridge, and a Fellow of the Institution of Mechanical Engineers in the UK. He works for a multinational company in the power industry, has presented technical papers at international conferences and holds many patents. He has published two books, the most recent is "The Big Picture, an Honest Examination of God Science and Purpose". He has lived on both sides of the faith fence. He is married, with two daughters.
This entry was posted in General. Bookmark the permalink.

Please leave a reply and I will try to get back to you.

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s