HC Deb 08 March 1999 vol 327 c12W
Dr. Starkey

To ask the Secretary of State for the Environment, Transport and the Regions if he will announce the results of the consultation exercise on the proposed incentive for local authorities to buy back ex-council flats and houses. [75707]

Ms Armstrong

Around 200,000 people in England have bought a council flat, mainly under the Right to Buy. Research shows that the great majority consider it good value for money. But some, especially in system-built flats, cannot afford the costs of maintenance. Some cannot re-sell their home—either because they cannot find a buyer, or because mortgage lenders refuse to give a loan.

The Government already provide financial help to councils to reduce high repair bills in flats. But some people—including some older people on low incomes— can no longer cope with the cost and strain of home ownership. Local authorities have powers to buy back housing, but their resources are limited, and they have other pressures. Last July we published a consultation paper offering to cover 25 per cent.of councils' costs.

Many respondents were concerned that the incentive offered was too small. We have therefore increased it to 35 per cent.of all costs incurred by a council above a threshold of £50,000 per council per year. This will target help on those areas with the greatest problems. We have also extended it in other ways—for example, to cover homes already bought back during 1998–99, and to include former New Town housing.

In addition to this incentive, when a council buys back a property it regains a capital asset which, sooner or later, it can re-let. It also reduces the costs of managing its leasehold property including, for example, trying to recover arrears of service charges. And in some cases, such as buying from an elderly or vulnerable person in arrears, the council will be helping someone whom it might otherwise have to re-house.

Local authorities are best placed to decide who needs their help. They will be free to decide whom to assist and on what terms. there are just two restrictions: the incentive only applies where they are buying from an individual, and where they are not using compulsory purchase powers. This limits the incentive to cases there occupants wish to sell their home.

We have today laid an Order before Parliament amending regulation 104 of the Local Authorities (Capital Finance) Regulations 1997. Subject to Parliamentary approval, this will come into force on 1 April and councils will then be able to use the financial incentive. A copy of the consultation paper, and a list of the responses, is in the Library of the House, and copies of the responses are available in the Library of the Department.