Charities (Protection and Social Investment) Bill [HL] — House of Lords, 2015-07-20
Topic: Housing
Robert Kerslake (Crossbench, Unknown): My Lords, I declare my interests as chair of Peabody and president of the Local Government Association. I speak in favour of this amendment in light of the Government’s stated intention to extend the right-to-buy policy to housing associations. I entirely support the Government’s aim to extend home ownership but have serious concerns about this proposed way of doing so Currently, tenants in housing association properties—unless their property was transferred from a local authority and therefore covered by a preserved right to buy—are able to purchase their properties only through right to acquire. That is limited to properties built or bought after 31 March 1997 and—this is crucial—funded through social housing grant. Under the Government’s current proposals to extend right to buy, all properties would be open to purchase and the available discount of up to £104,000 on a flat after three years’ occupation would be much greater. That would include significant numbers of properties built with absolutely no contribution from government Peabody was established 153 years ago by an enlightened, London-based but American-born banker, George Peabody. The aim of the Peabody Donation Fund that he launched in 1862 was to, "ameliorate the condition of the poor and needy of this great metropolis, and to promote their comfort and happiness" His contribution was £500,000, equivalent to nearly £1 billion at today’s prices. By 1882, 3,500 properties had been constructed, including the Whitechapel estate in east London and the Wild Street estate in Covent Garden. By 1939, there were 8,000 properties. Today, Peabody is established by statute and has 28,000 properties, but its mission has remained essentially the same. In all of its 153 years, it has received public funding for only 40 Given that the average value of a Peabody property is over £350,000, it is likely that, even with the discount, sales will be to the better-off residents. Experience from local authority sales though right to buy is that, over time, substantial numbers of the properties are sold off, so that one-third of the homes become buy-to-let properties at market rents. These can be as much as double social rents, and so not accessible to low-income families, as was originally intended. The Government’s intention is, rightly, to see one-for-one replacement but, again, local authority experience is that this is unlikely to be achieved, and certainly not at the pace of the sales or in the locations where the sales have occurred I have spoken extensively of Peabody, but since I first raised this issue I have been inundated by many people and organisations of all shapes and sizes with very similar concerns. For example, the Holt and Neighbourhood Housing Society was brought to my attention by Norfolk county councillor, Dr Marie Strong. This is what the chairman of that society has to say: "The Society was funded in 1960 with land and finance by a local family because of concern for affordable local housing. Now, with the generosity of local people, the Society has 35 properties in Holt, Glandford and Letheringsett, managed by a committee of local volunteers. The aim is to provide affordable housing for local people in housing need. Not bound by local authority rules the properties are always allocated to local people which helps ensure a continuity of the community. The rents are around one-half to two-thirds market rent. The government proposal would be a gross violation of what was intended—that the properties would be let in perpetuity to local people" If the policy is pursued in its current form, it will be contrary to the charitable intent of Peabody and housing associations like it. It would also—this is the critical point—be a major disincentive to charitable benefactors such as George Peabody and the local family in Norfolk that I referred to, to donate their money or their land for good causes, if the Government can intervene and direct the sale of those assets for very different purposes One wonders what George Peabody would have made of this. In 1866, he said that his donation would, "act more powerfully in future generations than in the present; it is intended to endure forever" Far from enduring for ever, the sequestration of property built with private philanthropic money would seriously undermine the charitable foundations and ongoing objectives of Peabody and other charitable housing associations like it. The amendment would protect charities from this, both now and in future.