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Housing federation chief faces MPs

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Councils cannot blame housing associations if they are forced to sell high value homes to finance the new right to buy discount for association tenants, the chief executive of the National Housing Federation has told MPs.

David Orr was quizzed by the communities and local government select committee on Monday on the organisation’s deal with government to avert a statutory right-to-buy being imposed on housing associations.

Ministers are expected to force councils to sell their most valuable homes as they fall vacant and send the proceeds to Whitehall, where they will be used to finance association right-to-buy discounts.

Under the deal struck by the federation – the associations’ trade body - tenants will be allowed to buy their homes but sales could be blocked in areas with shortages of social housing, in which case tenants would be offered the opportunity to buy elsewhere.

Told by committee chair Clive Betts that he was “probably not the pin-up of many local councils that have been excluded from this”, Mr Orr said: “They have not been excluded. It was open to local government to have discussions as we have with government.

“The proposal to sell high value local authority assets was in the Conservative manifesto and Queens’s speech and there were plenty of opportunities for colleagues in local government to have engaged in the debate as we have with government.

“We have never sought or endorsed [high value sales by councils] as a method of funding right-to-buy. Where government finds the money is a matter for government.”

Questioned on the government’s separate proposal to cut social housing rents by1% each year for the next four years, Mr Orr said this policy put at risk housing associations that had recently received homes from councils in large scale voluntary stock transfers as they would have planned their long term business on assumptions that had now changed.

“If you are a recent stock transfer and planned for rent increases at CPI+1% for 30 years on back of a promise by previous government then a 1% cut is an existential threat,” Mr Orr said.

Other associations would be less affected but could be expected to cut back on neighbourhood services - such as helping tenants into employment – to concentrate resources on maintaining homes, he said.

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