Part 4: Social Housing in England Chapter 2: Vacant Higher Value Local Authority Housing Payments to Secretary of State by Local Housing Authorities Section 69: Payments to Secretary of State
This section enables the Secretary of State to make a determination requiring local authorities to make a payment to the Secretary of State. The payment must be calculated by reference to the market value of the higher value housing the local authority owns and which is expected to become vacant during a financial year, less any costs or other deductions that are set out in the determination. An example of a deduction could be the transaction costs involved in selling housing such as estate agency fees.
	"Housing" is defined in section 79 (interpretation) and means a building, or a part of a building, which is intended to be occupied as a dwelling or more than one dwelling. This definition does not include hostels. Housing "becomes vacant" for these purposes when a tenancy comes to an end and is not renewed either expressly by the local authority or by operation of law (see section 79). The definition would not, therefore, capture situations where, for example, a local authority renews a fixed term tenancy to the same tenant(s), where a tenancy is assigned or where someone succeeds to (i.e. inherits) a tenancy. The Secretary of State may specify in regulations cases in which housing is not to be treated as having become vacant (see section 79(2)).
	The determination must set out the method for calculating the payment (subsection (5)) and some or all of the calculation may be based on a formula (subsection (6)). Subsection (7) provides that a determination may provide for assumptions to be made in making a calculation. This will enable a determination to be made before the start of the financial year to which it relates as required by section 72. Examples might include assumptions about the rate at which an authority’s higher value housing will become vacant during the forthcoming financial year based on data from local housing authorities relating to earlier financial years, assumptions about the amount of stock held by local housing authorities at the start of a financial year and assumptions about the transaction costs involved in selling such housing. Any such assumptions must be set out in the determination.
	The definition of "higher value" in relation to a local authority's housing must be set out in regulations made by the Secretary of State (subsection (8)). The definition of "higher value" may be different for different areas, for different local housing authorities and for different types of housing (subsection (9)). In determining how to define "higher value" in the regulations, the Secretary of State may use any category of housing as a comparator and may take into account other factors considered appropriate. For example, the definition could be determined by reference to the value of each authority's own stock (i.e. as a proportion of each authority's housing stock), or by reference to house values in a particular area or by reference to house values nationally.