Analysis of Responses to the Future of Right to Buy in Scotland Consultation

6: BUSINESS AND REGULATORY IMPACT ASSESSMENT

Background

6.1 All policy changes, whether European or domestic, which may affect businesses or the voluntary sector should be accompanied by a Business and Regulatory Impact Assessment (BRIA). The BRIA allows policymakers to use available evidence to find proposals that best achieve the policy aims while reducing, as far as possible, costs and burdens. The Scottish Government prepared a partial BRIA as part of the consultation.

Q16: Do you have a view on the effect these proposals may have on your business?

6.2 Seventy (41%) respondents answered this question. Of these, 23 (RSLs, local authorities and one voluntary group) predicted that the effect of the proposals on their business would be minimal. Typical comments were:

'Losses of income would be offset by ongoing rental receipts and the overall negative effect would be minimal' (West Dunbartonshire Council).

'....the financial impact is neutral. However, in terms of asset management - sustaining control over the remaining stock will enable the Association to plan maintenance and renewal with more confidence and provide certainty to tenants over the sustainable future of their homes' (Fife Housing Association).

6.3 Many respondents identified positive impacts (both financial and otherwise) on their business:

• Increase in viability, enabling delivery of the business aims, and easing the ability to borrow in future (26 mentions, 19 of which were RSLs). For example:
  
  'Ending RTB would support us in delivering our business - providing housing for people in need. It would provide rental income stability and this in turn would enable us to deliver our planned investment programme for our stock' (Paisley South Housing Association)
  
  '...create a stable asset base on which to borrow' (Partick Housing Association).

• Reduced volume of administration associated with handling of applications to buy and also maintenance of waiting lists (10 mentions, seven of which were RSLs). One respondent commented:
  
  'Working for a Citizens Advice Bureau we do receive numerous queries about people who are unable to get social housing' (Slab Housing Project, Moray and Nairn CABs).

• Business planning will be made easier and more accurate (nine mentions across different sectors). For example:
  
  'We expect that our business should benefit from a stronger and more sustainable rental income stream and balance sheet' (Clyde Valley Housing Association).

6.4 A few respondents highlighted what they predicted would be negative impacts on their business:

• More demands for transfer requests which will increase administration costs (two mentions).
• Losses in professional/technical staff no longer required for valuations of properties (two mentions).
• Lower capital receipts which are relied on to fund SHQS (one local authority).
• Will necessitate review of business plan (one local authority).

Q17: Do you have any comments on the partial BRIA?

6.5 Twenty nine (17%) respondents answered this question. Thirteen (10 being RSLs or local authorities) explicitly welcomed the BRIA as being comprehensive and reasonable.

6.6 Three respondents suggested that costs of handling the complex queries associated with right to buy should also be considered in the BRIA.

6.7 Seven respondents (five of them RSLs) disagreed that Option 1 (do nothing) was cost neutral. One remarked:

'While it (Option 1) does not involve any additional costs relative to the status quo, the effect of the RTB in its present form is that assets provided with public funding are lost and cannot be replaced. We believe that this carries a significant cost for Government, landlords and prospective tenants' (Cassiltoun Housing Association).

6.8 Five respondents (three of them RSLs) considered that Option 3 (moving to modernised RTB) would have a much greater negative impact than the BRIA suggested, due to the increased complexity which they predicted would ensue.