Baroness Taylor of Stevenage (Lab)

My Lords, I will first address the amendments tabled by the noble Baroness, Lady O’Neill of Bexley, and moved by the noble Lord, Lord Jamieson. I would like to reassure the House on our intentions behind Clause 9 of the Bill, which relates to the use of receipts from the sale of homes under the right-to-buy scheme. Clause 9 simplifies and modernises how the rules on right-to-buy receipts are managed. Every stock-holding authority currently has an agreement with the Secretary of State allowing it to retain all its net right-to-buy receipts, provided it spends those receipts on replacement social housing. In practice, this is administratively burdensome for both councils and central government. Currently, whenever the rules on receipts change—for example, permitting councils to combine their receipts with grant funding—the department must reissue all the retention agreements to every stock-holding authority, which is around 160 individual agreements. Clause 9 replaces this with a simpler approach. It provides the Secretary of State with a power to modify these requirements by determination, removing the need to reissue agreements many times over while maintaining oversight. This clause therefore reduces administrative burden, improves responsiveness and supports councils to deliver more homes. The rules on pooling of right-to-buy receipts will continue to be governed by the regulations and any significant changes to those rules will continue to need to be made through a statutory instrument, subject to the negative procedure. I know it has been a concern of some noble Lords that we may be seeking to use this clause to require councils to start repaying a portion of their receipts to the Treasury. I reassure noble Lords that this is absolutely not the case. We have committed to allow councils to retain all their right-to-buy receipts indefinitely, and Clause 9 makes it clear that the power of determination cannot be used to increase the amount that local authorities are required to return to the Secretary of State. I am grateful to the noble Baroness, Lady O’Neill, for Amendments 26 to 32, which would replace the power Clause 9 introduces for the Secretary of State to make determinations on right-to-buy receipts with a requirement to use regulations in all cases. In July 2024, we were able to act quickly to give local authorities greater flexibility to spend their right-to-buy receipts to accelerate the delivery of new social and affordable homes. Importantly, this included permitting receipts to be combined with Section 106 contributions and removing the cap on the proportion of a new home that can be funded by right-to-buy receipts. The amendments tabled by the noble Baroness would remove that flexibility and require all changes on right-to-buy receipts to be made through regulations. In practice, this would mean that the existing process would remain in place, with the administrative burden it entails for councils and central government. It would also result in delay and complexity in the system and make it harder to respond to the operational needs or make technical adjustments in a timely way. For these reasons, the Government cannot support these amendments. The current approach strikes the right balance between flexibility and oversight. Amendment 33, tabled by the noble Baroness, Lady O’Neill, would require the Secretary of State to consult local housing authorities before making any determination on the use of capital receipts. I reassure the Committee that the Government fully recognise the importance of engaging with local authorities on these matters. Where changes to rules governing the spending of right-to-buy receipts are proposed, it is standard practice to engage with the sector to ensure those changes are informed by local experience and delivery considerations. Placing a blanket statutory duty to consult in all circumstances would introduce unnecessary rigidity and could delay the implementation of technical or operational changes. It is important that we retain the ability to act flexibly and responsively while continuing to engage with our local authorities in a proportionate and meaningful way. Amendment 52, tabled by the noble Lord, Lord Fuller, proposes a new clause be added to the Bill to recycle right-to-buy receipts within the same housing market area before these are returned to the Secretary of State. Under the existing right-to-buy receipts framework, where local authorities are unable to spend the receipts on new affordable housing within the five-year period, the unused receipts must be returned to the Secretary of State. They are then given out as grant to other social housing providers by Homes England, or for receipts in London by the GLA. Homes England seeks to redistribute those receipts where possible to the same geographical area in which they were generated, and all receipts generated in London are spent in London. Under the framework, local authorities are also able to work with other local authorities on the spending of right-to-buy receipts on new affordable housing and with other local housing providers. The Government are also extending the period in which receipts must be spent to 10 years for receipts generated from 2027-28 onwards, ensuring receipts are retained in the same housing market areas for longer. This is intended to support councils to plan and deliver longer-term and larger projects. We therefore reject this amendment on the grounds that there is already flexibility with the right-to-buy receipts framework for local authorities to work with other local housing authorities and providers on delivering new affordable homes using those receipts, and that the system for the recycling of receipts already looks to prioritise the spending of the receipts in the area where they were generated.