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What councils could learn from housing associations' backroom dealings

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Councils voiced their anger this week at what has been fairly described as a “backroom deal” between ministers and the apparently powerful lobby group that represents England’s housing associations.

As LGC went to press, the National Housing Federation (NHF) was close to agreeing a deal that will see its members (voluntarily) extend the right-to-buy to their tenants in exchange for full financial compensation for their losses.

Under current government proposals, this compensation package will be paid for by councils through the (compulsory) sale of their high-priced homes.

Councillors’ outrage at this secretive pact is justified for several reasons.

At the top of the list is the fact that the pact allows a significant and controversial policy to escape parliamentary scrutiny. A vote by NHF members in favour of the voluntary arrangement would avoid the need for new legislation.

Such scrutiny is essential to properly assess the impacts of the policy on councils and their ability to assist the increasing numbers of their residents who find themselves homeless.

According to homelessness charity Shelter, the policy could force the sale of 113,000 council homes across England. Some central London authorities risk losing almost all of their stock.

Such losses will force authorities to shunt homeless families into other boroughs and even out of the capital, as is already increasingly the case.

One association vote local government leaders might want to watch is the one by Peabody, whose chair Lord Kerslake occupies the same role at the Centre for Public Scrutiny.

Months after retiring as permanent secretary at the Department for Communities & Local Government, Lord Kerslake called the revised right-to-buy “wrong in principle and wrong in practice”.

Will he now vote for a measure that robs politicians of the opportunity to examine and challenge the policy he considered so wrong?

As LGC went to press, Peabody was still mulling its position.

Whatever the outcome of the NHF vote, there is at least one useful lesson for local government in this debacle.

The reason associations secured this private arrangement with ministers could be attributed to the considerable housebuilding grunt they collectively possess.

While the number of homes built by councils remains in the hundreds, associations pump out one in five of England’s new houses and flats.

Associations have rendered their housing operations indispensable to governments that struggle to fix the unholy mess of the housing market.

If councils want ministers to leave their housing finances alone, they could take a page out of associations’ books. But preferably without doing backroom deals that disregard their partners.

By ramping up housebuilding, councils could render their housing assets untouchable too.

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