Housing and Urban Development Bill (Hansard, 9 February 1993)

§ Sir George Young

My Department is today writing to all housing authorities, other than those which have already disposed of their housing, inviting them to apply if they wish to be considered for a place in the 1993–94 disposals programme. Applications should be received by Friday 19 March.

The Department's expenditure estimates for the three years of the public expenditure survey make provision for the costs of housing disposals. A sum has been provisionally allocated within the overall totals for these years which would allow for the transfer of about 25,000 houses in the first year's programme under the new provisions, assuming that the average exchequer costs of disposals remain broadly similar to those which have taken place in recent years. Larger programmes may be possible in later years.

I set out below the policy guidelines we propose to adopt for the first programme. The benchmark size for disposal applications will be between 3,000 and 4,000 properties, with preference being given to transfers at and below the lower end of this range. In particular circumstances, for example when an authority with large stocks is making a split disposal, transfers exceeding this benchmark will be considered, subject to an overriding limit of 5,000 properties in any one disposal to a single landlord or linked associates. It will be for transferring authorities to determine the ways in which they split their stock.

For the first year, disposals will be accepted for the programme only if they are to be made to registered housing associations. In assessing whether the disposal contributes to diversity of ownership in an area, consideration will be given to whether the recipient organisations are existing registered housing associations, or associations newly formed for the purposes of the disposal.

Proposals for transfers to associations associated within a group structure will be considered on their merits and in the light of the overall housing strategy for the area. There will be an overriding proviso that members associated in a group structure may not together acquire more than 5,000 properties from any one local authority.

Authorities accepted for inclusion in the 1993–94 programme will not be expected, while they remain in the programme, to continue to prepare their housing management function for compulsory competitive tendering—CCT—in respect of the properties to be transferred. Should a transfer not take place as planned during 1993–94, the authority will be expected to comply with the statutory requirements for housing management CCT and to make the necessary preparations.

For disposals accepted for the 1993–94 programme, it is intended that the existing discounted cash-flow method will continue to be used to determine the transfer price of the stock. Rent guarantees will be a matter for local discretion, but should not exceed five years. As with past transfers, purchasing associations will be expected to fund the transfer wholly from private sector sources.

In considering the acceptability of a proposed disposal for inclusion in the programme, the Secretary of State will take into account the estimated Exchequer costs of that disposal, and whether a majority of the tenants who would be affected by the disposal are in his opinion likely to oppose it. In reaching an opinion on the second of these issues, he will take account of any relevant systems an authority may have for consulting its tenants, and any 548W planned exercises for further tenant involvement. He will also take into account the criteria set out in section 34(4A) or section 43(4A), as appropriate, of the Housing Act 1985.

My right hon. Friend the Secretary of State for Wales will be making an announcement in due course on the arrangements that will apply to disposals in Wales.