“Lack of transparency” exposed at GBC budget meeting as £2.33m repaid to government

At the Budget Meeting of Guildford Borough Council (GBC) on 10 February 2021, Councillor Nigel Manning (Ash Vale) publicly exposed that the Coalition led Council (Liberal Democrat / Residents for Guildford and Villages) had failed to utilise £2.33 million received under the “Right to Buy” Council Houses Scheme, a figure which it had published in its previous reports. The Committee heard that when a council tenants buys their council home, the funds are retained by the council in order to provide additional council homes, however if unspent within three years, this money has to be returned to the government.

Councillor Manning, former Lead Member for Finance & Resources, challenged this and said, “When I was lead member for finance and assets I asked a frequent question, which was, have we enough HRA (Housing Revenue Account) new builds to use up the Right to Buy funds, to avoid any payback to the government”. He also expressed concern that he could not find this figure transparently published within any report. “Whilst I understand the desire to keep HRA reserves as high as possible a cheaper source of borrowing to fund GBC capital projects, it should not be at the expense of new council housing and our residents, some of whom have been waiting many years”. The financial year in question is 2019/20, which was mainly COVID-19 free. He warned that the current financial year is also at risk and questioned the current administrations’ ability to prevent this from occurring again.AAs the former Lead Member for Finance & Resources he said that “if the record that had been in place during my time, was still in place now I think it would be far easier to see when the money was due to be repaid and to ensure it was used”.

Councillor Caroline Reeves, who was also the Leader of the Council at the time of this failure, confirmed at the Budget meeting that the money had been repaid to the government and that the Coalition in charge at GBC had not provided sufficient social housing. This financial incompetence means Guildford Borough Council will now have to find £2.33 million from its own reserves to deliver replacement Council Houses. Caroline Reeves responded  by saying “Having to repay money from Right to Buy is definitely not what we need to be doing, and I can assure you that we are going to great lengths to ensure we do not do that again.”

After the meeting Councillor Manning said “I find this whole situation very sad for those residents who are on our current housing waiting list. It is also ironic that despite the current administration’s election promise of being “open and transparent” I managed to expose this failure even though it had not been transparently disclosed in any previous council report. My main concern now is that I was left with no firm assurance that this will not happen again, and my understanding is that further “Right to Buy” receipts for the current year are also at risk”.

GBC statistics show that as of September 2020 there are over 2500 applications for housing with the average wait times ranging for 2 years 8 months for a studio flat and 6 years 2 months for a 2-bedroom house. Receipts received from the right to buy must be used in conjunction with GBC finding and cannot exceed 30% of the total cost of providing new housing to ensure the targets of housing is met.

The webcast of the council meeting can be found online, together with associated agenda, papers and reports here: https://www2.guildford.gov.uk/councilmeetings/ieListDocuments.aspx?CId=159&MId=1022 

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