Select Committee on Office of the Deputy Prime Minister: Housing, Planning, Local Government and the Regions Memoranda

Memorandum by Capital Receipts Group (HOU 26)


  The Capital Receipts Group is a cross-party group of debt-free housing authorities from all over England. (A list of 51 authorities supporting the group is attached.) The group has been formed specifically to oppose Clause 10 of the draft Local Government Bill. Some councils in the group still retain their housing stock while others have transferred their stock to a Registered Social Landlord (RSL); all are united by their opposition to the proposal set out in Clause 10 (as explained in the explanatory notes to the Draft Bill) that the Secretary of State will take powers to sequestrate and redistribute Housing Capital Receipts.


  Many members of the Capital Receipts Group are concerned about the effect that Clause 10 of the draft Local Government Bill will have on local authorities' ability to facilitate the provision of affordable housing. As debt-free authorities members of the Capital Receipts Group are currently able to spend 100 per cent of all their "Right to Buy" receipts and many chose to do so on the provision of affordable housing—if Clause 10 is implemented then our members will lose 75 per cent of their "Right to Buy" to a central pool and it is unclear how much resource, if anything, will be received back from the pool.

  In his statement to the House on 18 July 2002 the Deputy Prime Minister, John Prescott said that, "tackling housing shortage is a national responsibility and we must all play our part—central and local government alike". The Deputy Prime Minister also stressed that "there need to be not just more homes, but more homes that people can afford". The Capital Receipts Group agrees that its members share a responsibility to tackle housing shortage in their communities but implementation of Clause 10 will undermine their efforts to provide more affordable homes. The Government is jeopardising the partnership between central and local government.

  We believe that the suggestion that the Secretary of State can take one community's assets and move them elsewhere in the country is wrong in principle. The group accepts that the Government has a role to play in allocating central resources between local authorities but repudiates any claim that the Government makes on any authority's own assets. Money raised from the sale of our council houses should stay within our local communities. Indeed this move could be seen as an attack on local democracy.

  The Capital Receipts Group does not accept the argument that borrowing supported by central government has funded the provision and upkeep of authorities' housing stock. Some authorities in the group have received negative housing subsidy for decades and all authorities have invested substantial sums provided by their tenants. The proceeds from the sale of these housing assets should be re-invested locally, not become part of a national resource.

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