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Right to Buy - Unethical/Sinister change?

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Comments

  • martinsurrey
    martinsurrey Posts: 3,368 Forumite
    TheGardener wrote: »
    Really - how? - Housing Revenue Accounts do not take subsidies from the 'tax payer' that would be illegal. However, individuals do have subsidies (HB) HRA (council and HA's) are simply social enterprises. The difference between the market rent and the social rent are about the profit margins and business model. The social housing rent is driven by the costs of provision - market rents are driven by profit requirements of the landlords. 'The Council' do not pay for council housing - the tenants do.

    If the council own an asset that could generate revenue of £10,000 on the open market but accept £6,000 from someone for it, the £4,000 difference is a subsidy as defined by the World trade organisation.

    That subsidy is an opportunity cost to the council, one which they make up for through either cutting other services, or taxing more.
  • FBaby
    FBaby Posts: 18,367 Forumite
    First Anniversary First Post Combo Breaker
    Over the last year or two almost all councils have changed their tenancy agreements to make 'succession' only available to partners, not their children.
    Oh yes, that's the other one. Single mum gets a nice council house, then 'dates' her boyfriend for years so that she can keep her council home and entitlement to HB, and then when they finally decide to make it official, boyfriend who earns a very good income moves in, sale his place and buy the council home at discount, making a nice profit!

    A few of them have dared posting here!
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    martinsurrey wrote: »
    If the council own an asset that could generate revenue of £10,000 on the open market but accept £6,000 from someone for it, the £4,000 difference is a subsidy as defined by the World trade organisation.

    That subsidy is an opportunity cost to the council, one which they make up for through either cutting other services, or taxing more.

    The Housing Revenue Account states that housing revenue cannot subsidise or be subsidised by other means. It has to be self financing and it cannot subsidise other council services. Any deficit in the council housing budget will not result in services being cut or increased taxation.
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    FBaby wrote: »
    A few of them have dared posting here!
    Many rtb threads are started by newbies with the intention of promoting a reaction. I suspect these "newbies" are one attention seeker.
  • ScorpiondeRooftrouser
    ScorpiondeRooftrouser Posts: 2,851 Forumite
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    Norman_Castle wrote: »
    The Housing Revenue Account states that housing revenue cannot subsidise or be subsidised by other means. It has to be self financing and it cannot subsidise other council services. Any deficit in the council housing budget will not result in services being cut or increased taxation.

    So where do you think the subsidy for right to buy ultimately comes from? We are talking solely about RTB subsidies here. not ongoing rental, which is an entirely different matter.
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    ScorpiondeRooftrouser wrote: »
    So where do you think the subsidy for right to buy ultimately comes from? We are talking solely about RTB subsidies here. not ongoing rental, which is an entirely different matter.
    It comes from the loss of potential profit from the sale of an asset. The housing stock is separate from other council assets so the loss will not be funded through council tax payments.
  • ScorpiondeRooftrouser
    ScorpiondeRooftrouser Posts: 2,851 Forumite
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    Norman_Castle wrote: »
    It comes from the loss of potential profit from the sale of an asset. The housing stock is separate from other council assets so the loss will not be funded through council tax payments.

    And who owned the asset?
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    martinsurrey wrote: »
    If the council own an asset that could generate revenue of £10,000 on the open market but accept £6,000 from someone for it, the £4,000 difference is a subsidy as defined by the World trade organisation.

    That subsidy is an opportunity cost to the council, one which they make up for through either cutting other services, or taxing more.
    what an excellent post

    the HRA must, as stated by law, be self balancing, but that does not, as you so rightly point out, address:
    a) the opportunity cost; and
    b) the replacement cost

    the rents charged are not "market rate", they are "subsidised" rate
  • Norman_Castle
    Norman_Castle Posts: 11,871 Forumite
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    ScorpiondeRooftrouser wrote: »
    And who owned the asset?
    The housing department of the council which is not funded or subsidised from council tax payments.
  • Guest101
    Guest101 Posts: 15,764 Forumite
    Norman_Castle wrote: »
    The housing department of the council which is not funded or subsidised from council tax payments.
    It's still taxpayer funded.
This discussion has been closed.
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