Newcastle council leader calls for Right to Buy changes

The leader of Newcastle City Council has called for a change to the controversial Right to Buy scheme to prevent homes from being sold ‘from under our feet as soon as they are built’.

Speaking at an event organised by the think tank Centre for Cities, Cllr Nick Forbes said the rules around the Government programme need to be changed to stop losing homes back to the private sector.

‘In my city, about a third of the council houses sold under the Right to Buy in the 1980s and 1990s are now in the private rented sector, charging market rates,’ said Cllr Forbes.

The Newcastle City Council leader added the Government’s decision last year to lift the cap on councils borrowing against assets to build new homes a ‘game changer when it comes to house building’.

‘We know we will not get significantly more capacity from the private sector,’ said Cllr Forbes. ‘Any more capacity will have to come from the public sector. Raising the cap or abolishing the cap gives us the opportunity.

‘The one caveat I would have is there’s not much point building more council houses if we are also subject to the Right to Buy, and they are sold from under our feet as soon as they are built.’

The Local Government Association (LGA) has also called for changes to the Right to Buy scheme.

In a briefing note prepared for tomorrow’s (31 January) House of Lords debate on social housing, the LGA argue it is ‘essential’ that the Government allows councils to keep 100 per cent of receipts from Right to Buy sales to invest in new affordable housing.

Cllr Forbes was also quizzed at the event about councils using money from the Public Works Loans Board to buy commercial properties, like shopping centres and office blocks.

‘The Government are very nervous about Public Works Loan Board borrowing,’ he told the event. ‘At the moment, it’s the only serious route for local government to go down, which is why the LGA is developing a bonds agency to provide an alternative if the Government decides to turn the tap off when it comes to PWLB in the future.

‘There’s no doubt we have seen a huge amount of entrepreneurship amongst many local authorities to generate incomes in a way that recycles money back into revenue budgets and replaces the money that has been lost from central government.

It seems odd to me that the secretary of state would stand up just before Christmas and tell us that is the wrong thing to do. I thought we were supposed to be more entrepreneurial, not less.’

The Centre for Cities event was held to promote its latest report, Cities Outlook 2019, which claimed cities in the North have been hit hardest by cuts to local authority spending.