A council is required to pay to the Government (i.e. pool") 75 per cent. of its receipts (less its costs and various allowances) from right to buy sales or any other scheme where the tenant intends to use the property as their principal dwelling. It may keep the remaining 25 per cent. to spend on capital purposes.
Councils that were debt free on
Since 1997 the Government have consistently invested more in housing than it has received in pooled capital receipts. In 2004–05 the amount paid to Government from all housing receipts (not just right to buy) was £1.7 billion. The amount invested in housing was £4.1 billion i.e. almost 2 ½ times the amount. The ratio of amount invested to amount set aside is expected to increase substantially in the future.
Pooled capital receipts collected from debt-free and with-debt authorities are treated differently. Pooled capital receipts from debt-free authorities, that is, local authorities that had no long term outstanding borrowing on
If the disposal of the council house is not to somebody who intends to use it as their principal dwelling and is not through the right to buy, the local authority may use their capital allowance to extinguish up to 100 per cent. of the capital receipt for use on the provision of affordable housing or regeneration within the local authority. In 2004–2005, £23 8 million of capital receipts were extinguished in this way for retention by local authorities.