All hon. Members will recognise the importance of having well-functioning local councils that provide essential statutory services local residents rely upon. Government will continue to work directly with a small number of councils in difficulty, and this should be done in a way that is not punitive and is based on genuine partnership to secure improvements. Today, I would like to update the House on the statutory interventions in Slough and Woking.
Slough Borough Council
On 22 October 2024, I announced to the House that the Secretary of State for Housing, Communities and Local Government, my right hon. Friend the Member for Ashton-under-Lyne (Angela Rayner), was minded to issue new directions to Slough borough council, and that I was seeking representations on a proposal. I also announced that if I implemented this proposal, I would reappoint the current three commissioners, and also appoint the interim chief executive, Will Tuckley, as managing director commissioner.
The proposal was to require the council to take actions that are consistent with the priorities that the commissioners have set for the council; provide for commissioners to continue to be able to exercise council functions relating to governance, finance and appointments; and to extend the timeframe of the statutory intervention until 30 November 2026. This followed the publication of the fifth report from commissioners, which, as I outlined on 22 October, provided evidence that there are still a substantial number of areas that require further improvement at the council, and there remains volatility in the council’s overall financial position. In my view, the report provides considerable evidence that the authority is not complying with its best value duty, as outlined in the Local Government Act 1999 and best value guidance published in May 2024.
Following consideration of the two representations that were received, and noting the support from the council for the proposal and the concerns raised about the pace and impact of the intervention to date, the Secretary of State and I have decided to implement the proposals announced on 22 October and issue new directions to the council, which come into effect immediately and will remain in force up to and including on 30 November 2026. The directions issued on 1 December 2021—updated on 1 September 2022 and 22 May 2023—are revoked with immediate effect.
I am therefore today confirming the reappointment of the current three commissioners, Gavin Jones, Denise Murray and Ged Curran. They will continue to work in partnership with the council to support its recovery. Alongside this, I have appointed Will Tuckley, the interim chief executive, as managing director commissioner. This will strengthen the relationship between the commissioner team and council and support the council to lead its recovery. The three reappointed commissioners have been nominated for the duration of the intervention and the managing director commissioner has been nominated for 18 months.
I am publishing today a consultation on reforms to the right to buy in England.
This Government are committed to the biggest increase in social and affordable house building in a generation and to supporting councils to increase their capacity to build.
After more than a decade of marginalisation, we must once again assert the necessity and the value of social housing. It is a crucial national asset to be proud of, to invest in, to protect and to maintain.
We cannot achieve this while councils are losing homes quicker than they can replace them through the right to buy scheme. Nor can we achieve this while councils risk losing their investment in a newly built social home as soon as three years after completion. Between April 2012 and March 2024 there have been over 124,000 council right to buy sales, and in the same period fewer than 48,000 homes have been replaced.
Reduced access to affordable social rented homes has seen millions of low-income families forced into insecure, poor quality and unaffordable accommodation. Over 150,000 children are now in temporary accommodation and nearly 1.3 million people on social housing waiting lists. The cost of this has been borne not only by those low-income families unable to secure a social home, but by the taxpayer in the form of a rapidly rising housing benefit bill. This is unsustainable and represents a poor use of public money.
This Government remain committed to right to buy, which is why we are not proposing its abolition. It is an integral way for social tenants to get on the property ladder, many of whom may not otherwise be able to access home ownership. But crucially we also need to protect social housing stock to meet future housing need, to support councils to replace homes that are sold and to improve their confidence to scale-up delivery.
As with other interventions led by my Ministry, the council will be required to cover the costs associated with the commissioners. The fees for each individual are detailed in their appointment letters, published on www.gov.uk'>www.gov.uk. I am assured this provides value for money given the expertise that is being brought, and the scale of the challenge in councils requiring statutory intervention.
Woking Borough Council
As the House will be aware, in May 2023, the former Secretary of State (the right hon. Michael Gove) announced a statutory intervention in Woking borough council, following evidence of extensive best value failure compiled in an external assurance review. The review detailed the exceptional level of financial and commercial risk to which the council had exposed itself, and concerns regarding the quality of its strategic financial decision making and its commercial dealings.
Historic commercial mismanagement and major governance failures led to Woking borough council accumulating an extraordinary level of debt, far exceeding usual levels of borrowing for a council of its size. This is an extreme position for a council to be in, and will require unprecedented support from Government to resolve. Woking clearly requires a significant programme of change to ensure it is operating to the required standard. I am grateful to the commissioners for working with the council to improve its strategic financial management and governance, and in charting a path to reduce Woking’s debt as far as possible.
On 29 May 2024, the commissioners at Woking submitted their third report. I will be publishing this report, and my response, later today. It is clear from their report that Woking still faces significant challenges in its recovery, particularly regarding its financial position, but I am pleased that the council remains committed to working with commissioners to deliver fundamental change through its improvement and recovery plan. There are lots of obstacles ahead, but I am confident that the commissioners and council have a good understanding of the challenge and are beginning to deliver a robust plan of improvement.
I also join the council in thanking their auditor Grant Thornton for their recent public interest report on Woking’s historic investment practices, which the council will consider later today before issuing their formal response. The council has the full support of the commissioners in addressing the recommendations. I will also be reflecting on the public interest report and what lessons it can provide on the drivers of council failure.
I urge all councils to consider whether they could be doing more to ensure they are delivering the sound decision making that residents deserve, including considering the characteristics of a well-functioning authority as set out in best value guidance.
Conclusion
The Government are committed to working in genuine partnership with councils under intervention to support their reset, reform and recovery, making sure residents have what they need from their local council, including confidence in its governance, financial management and service delivery. I will continue to monitor progress over the coming months and ensure these councils get the support they need to secure sustainable continuous improvement.
I will deposit in the House Library copies of the documents I have referred to, which are also being published on www.gov.uk today.
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The scheme must be reformed so that it better protects the existing stock of social rented homes, provides better value for money for the taxpayer and ensures fairness within the system.
We have already taken significant steps to deliver this reform. In July, we increased the flexibilities on how councils can use the capital receipts generated by a right to buy sale to accelerate the delivery of replacement homes.
The Government, at autumn Budget, confirmed that councils will no longer be required to return a proportion of the capital receipt generated by the sale of the home to HM Treasury, which has totalled c.£183 million a year. This will ensure that councils are better able to build and acquire new council homes to meet local housing need.
The Government also confirmed at the autumn Budget the reduction of maximum right to buy cash discounts to their pre-2012 regional levels—ranging from £16,000 to £38,000—following a review conducted by the Ministry of Housing, Communities and Local Government. Secondary legislation was laid on 30 October and new discounts will come into force tomorrow. This is a crucial step in delivering a fairer, better value and more sustainable scheme. Reducing discounts will protect existing social housing stock, while ensuring long-term tenants can still benefit.
Through the same secondary legislation, we are increasing protections for newly built social homes from being sold under the right to buy, by increasing the “cost floor” period during which discounts can be reduced to account for money spent building or maintaining the property from 15 years to 30 years. This will give councils greater confidence to scale-up delivery of social homes for those who need them most.
But these measures are only part of the reform needed to achieve a fairer and more sustainable right to buy scheme. The eight-week consultation, which I am launching today, proposes the broader reforms necessary to ensure that the right to buy is sustainable and meets the needs of tenants who aspire to own their own homes, while also ensuring that the homes sold can be replaced. We are seeking views on:
Eligibility—we propose to increase the eligibility requirement (currently three years as a secure tenant) to support councils to rebuild the stock of council homes and to better ensure that long-term tenants who have lived in, and paid rent on, their social homes are able to own their home through the scheme.
Discounts as a percentage of the property value—we propose to amend the current percentage discounts to better align with the new cash discounts and propose that the same rules should apply to houses and flats.
Exemptions—we are seeking views on whether the current exemptions to the scheme are fit for purpose and whether new build homes should be exempt from the right to buy, for a given period, to better incentivise councils to invest in new stock. We also welcome views on how to protect council investment in retrofitting and improving homes to a high standard.
Restrictions on properties after sale—once someone has purchased a home under the right to buy, it is theirs to live in and enjoy, the same as any home purchased on the open market. We do not therefore propose to introduce covenants to prevent homes being let out, which we think would be restrictive and too difficult for councils to administer. We are seeking views, however, on whether the time period in which the council has the right to ask for repayment of all or part of the discount received should be increased from five to ten years.
Requirements around the replacement of homes sold under the right to buy—we are seeking views on the benefits of replacement homes being for social rent to support the Government’s ambition to increase the number of social rent homes and whether replacements should be, as far as possible, of the same size and in the same area.
Simplification of the receipts regime—we are seeking views on how the current system can be simplified and strengthened to support the replacement of homes.
Through this consultation, we will better understand what barriers there may be to the introduction of these proposals and to inform their design. Subject to views in response to this consultation, we intend to bring forward legislation to implement any changes when parliamentary time allows.
I can also confirm today that the Government will not be extending the right to buy scheme to housing associations given the substantial costs to the taxpayer and the reduction in social housing stock that is likely to result. Eligible tenants will, however, continue to be able to buy their rented home at a discount, ranging from £9,000 to £16,000 depending on where their rented home is located, through the right to acquire scheme.
Further, I can confirm that the Government will not be taking forward the policy on the sale of higher-value assets proposed under the Housing and Planning Act 2016, which would have required councils to make a payment in respect of their vacant higher-value council homes and return some of the funds to the Government. The Government will repeal the provisions in the 2016 Housing and Planning Act when parliamentary time allows.
I look forward to continuing to work with all those with an interest in improving the system to make sure that these plans for reform are robust and deliverable.