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Housing crisis: Kerslake slams right to buy, Clark accuses councils of sitting on empty sites

Housing crisis: Kerslake slams right to buy, Clark accuses councils of sitting on empty sites

🕔01.Jun 2015

Bob Kerslake’s maiden speech in the House of Lords is likely to prove acutely embarrassing to the Government, with the newly ennobled peer planning a savage attack on Tory plans to allow tenants to buy housing association properties at knock-down prices. Meanwhile, the new Communities Secretary has accused councils and Whitehall departments of sitting on vacant land that ought to be sold off to build new housing, writes Paul Dale.

Lord Kerslake, the former head of the civil service and Permanent Secretary at the Department for Communities and Local Government, is expected to say the new policy is “wrong in principle and wrong in practice” and “won’t tackle the urgent need to build more housing and more affordable housing”.

His intervention coincides with a new Government initiative putting pressure on Whitehall departments and councils to step up the pace on selling vacant sites that they own in order to boost housing development.

Communities Secretary Greg Clark, speaking ahead of the first meeting of a ministerial housing taskforce, urged departments to “loosen their grip” on sites that are standing idle so they can be released for new housebuilding, with a target to release enough land for 150,000 homes by 2020.

Mr Clark added:

I want to see departments going further and faster than before, starting right away, to loosen their grip on sites that are standing idle and to turn them over for house building.

Councils are significant landowners and town halls should be looking at their estate, particularly brownfield sites, and thinking about how they could make better use of their holdings by releasing land for new homes for their communities.

While Mr Clark is looking at ways to quicken the pace of house building, Lord Kerslake will lead the fight to prevent thousands of housing association properties from being sold off.

As the most senior official at DCLG, Lord Kerslake may have been responsible for advising Conservative ministers in the former coalition government about the pros and cons of allowing the disposal of housing association properties.

But Whitehall impartiality rules mean that he will have been unable to speak publicly until now.

It’s also been confirmed that Lord Kerslake is about to become the chairman of the board of Peabody, one of London’s oldest and largest housing associations. Peabody has led criticism of housing association property sales which it claims will worsen the housing shortages.

Under the Government’s plans housing association tenants will be entitled to discounts of up to £102,700 in London and £77,000 across the rest of England.

Ministers say housing associations will be compensated for the discounts from money raised by forcing local authorities to sell off their most expensive housing stock when it becomes vacant. They say the plan will ensure “one-for-one replacement” of affordable properties sold.

At the moment housing associations, most of which operate as charities, are banned from selling their assets at a loss. Legislation will be required to change this.

The policy was at the heart of the Conservative General Election manifesto, with David Cameron claiming the move would herald a return to Margaret Thatcher’s populist council house sales programme of the 1980s and 1990s.

Lord Kerslake, who sits as a crossbencher in the House of Lords, told the Observer:

I will raise my serious concerns about the policy in its current form. I think it’s wrong in principle and wrong in practice, and it won’t help tackle the urgent need to build more housing and more affordable housing in this country, particularly in London.

He is expected to demand that ministers hold urgent discussions with housing experts to rethink the policy, which has been widely criticised by the housing industry and business groups, including the CBI, as hugely expensive, unworkable and potentially damaging.

Lord Kerslake headed the review into Birmingham City Council which is the catalyst for wide ranging reforms of the governance and capabilities of the country’s largest metropolitan authority.

The Observer also claims that Boris Johnson, the Tory mayor of London, has privately warned colleagues that the new right to buy scheme could be a disaster for the capital unless money raised through sales is reinvested to build affordable homes.

A spokesman for the mayor said:

He has been clear that the new policy must deliver an overall increase in house building in London, and that all the money generated from selling London homes is retained in the capital to help increase the supply of new homes, particularly affordable homes.

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