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GBC Expanding Affordable Housing Portfolio to Stop RTB Repayments

Published on: 29 Mar, 2021
Updated on: 31 Mar, 2021

GBC plans to build and buy more affordable properties, as well as improving the monitoring and reporting for the right-to-buy (RTB) income and housing revenue account (HRA) programme.

This was announced in the March 23 report from the Review Executive Working Group aimed at preventing repayment of more RTB receipts to the government.

At the end of 2018-19 and during 2019-20, a total of £2.7m had to be repaid (see KPMG to Probe Scandal of Hidden £2.7m Right-to-Buy Payments to Whitehall) because GBC had not built enough houses to use all of the RTB income within the three-year deadline.

The government has now extended this to five years and increased percentage of the total cost of replacement housing funded by RTB receipts from 30% to 40%.

Claire Morris

Claire Morris, GBC director of finance, said: “The proposed governance improvements will allow us to highlight potential problems in advance and give councillors complete clarity on how that money is being spent.

“These repayments do not affect council tax bills because the charges are not included in the cost of providing services to the borough.”

KPMG begins an independent review of the HRA monitoring and the timely use of RTB receipts in April and are expected to report to the council in June.

The report said Guildford Park car park will now be solely for housing rather retaining some car parking spaces, and part of the Weyside Urban Village (subject to Secretary of State approval) could be moved into the HRA to allow 40% of the cost of affordable housing to be funded by RTB receipts.

The council also decided to buy back homes previously sold under the RTB scheme or buying in advance from new developments. An extra £2.2 million was added to the acquisition budget.

An additional £13.5 million from existing funds may be earmarked for affordable housing, including providing grants to housing associations and working with other councils to build houses outside GBC boundaries..

The government’s RTB scheme enables those who have been a local authority or housing association tenant for at least three years the chance to buy their rented home at a discounted price.

Before 2012, councils were allowed to keep only 25% of capital receipts generated by this scheme, with the government using the other 75% to fund national housing programmes through Homes England. Since 2012, councils have been able to keep all their RTB income, providing it is spent on new affordable housing or related transaction costs.

At time of publication, no response from Conservatives, Guildford Greenbelt Group or Labour had been received.

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