Development Board for Rural Wales (Hansard, 22 July 1993)

§ Mr. Redwood

The Local Government and Housing Act 1989 empowers me to make regulations to govern the disposal of housing stock owned by the Development Board for Rural Wales. I have today laid such regulations before the House.

In December 1991, draft regulations for this purpose were subject to public consultation. In framing these proposals, due consideration was given to existing provisions for disposal of new town housing in England, but also to the fact that the board owns houses in four different local authority areas; to the very sizeable proportion of the total social rented housing stock in Mid-Wales that the board's stock represents; to matters of timing; and to the likelihood of a continued role for the board in promoting development in its areas after the disposal of its housing stock.

Views were sought on the questions of the appropriate way to decide the outcome of any formal consultation, that is to say whether the outcome should reflect the majority view or the individual preference of all who vote.

All the responses to the public consultation have been carefully considered.

I have decided upon some changes to the draft regulations featured in that consultation, and to act upon certain comments through administrative means as and when appropriate.

A list of those who responded has been placed in the Library of the House. Most respondents who commented on the matter believed that the outcome of a formal consultation should reflect the majority view. Having considered this, I, too, am now persuaded by arguments that this will be appropriate in the mid-Wales context, will be simple, and will encourage serious prospective landlords to come forward, thus giving tenants the greatest choice reasonably possible. The regulations which I have laid before Parliament provide for this.

I expect the disposal process to take approximately two years to complete and shall task the board to publish a proposed timetable.

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Under the regulations, the board's housing will be sold to social landlords—housing associations or local authorities—and will be available for social renting. Housing associations will be able to meet the price by borrowing against the expected net income. Local authorities will be issued with supplementary credit approvals to cover the purchase price, if they are successful.

In all this, tenants' interests will be respected. Those who transfer to local authorities will remain secure tenants, benefiting from the rights described in my council tenants charter. Those who transfer to housing associations will become assured tenants, and benefit from the rights secured through the tenants guarantee issued by Housing for Wales. Existing tenants' right to buy will continue in each case.

The flexi-ownership scheme operated by the board will be discontinued. An earlier consultation on proposals to introduce a national rents-to-mortgages scheme for council tenants, sought views on whether it should extend to secure tenants who transfer to housing associations. Our conclusion in the light of the responses we received was that it should not, so the statutory scheme will apply only to tenants who transfer to local authorities.

I do not expect that all the board's stock will be disposed of to a single new landlord; its geographical spread makes this unlikely. Terms of all disposals will be subject to negotiations between board and prospective new landlords.

In the regulations, I have provided for tenants' views to be taken into account in drawing up the short-list of prospective landlords for each parcel of stock, and in deciding how the stock should be divided; and, of course, for their collective wishes to decide the outcome of any contest between prospective landlords. I propose to provide funds for the tenants to receive professional advice throughout the process of disposal to underpin the exercise of their legal rights.

The development board will have the responsibility, under the regulations, to transact the business of disposal, but all disposals will be subject to my consent, as the statute requires.

Subsequent disposals of stock by a new landlord will also be subject to my consent, other than exempt disposals such as to a sitting tenant with the right to buy. My consent for a subsequent disposal will be given only if there is good reason for it.

The board will remain able to promote mid-Wales development effectively after disposal of its housing. We shall continue to address requirements for new social housing in mid-Wales, primarily through Housing for Wales and locally active housing associations, whatever the outcome of the disposal process.

The provisions which I have laid before the House will ensure expeditious and appropriate disposal of the board's stock; will secure tenants' interests, offer them the greatest choice reasonably possible, and respect their collective wishes; and will permit continued effective promotion of mid-Wales development.

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