Social housing has been given its biggest boost in decades as Theresa May makes solving the housing crisis her Government’s top domestic policy priority with a series of eye-catching announcements. The icing on the cake was the decision to scrap the borrowing cap which has severly restricted the amount of money local authorities have been able to spend on building new council homes. It is giving Town Halls exactly what they have been asking for in recent years, but it also loads the pressure on them now to deliver. There can be no excuses, unless the Treasury heaps on lots of difficult to meet conditions. The early indications are that this is not the case. Local authorities are simply being asked to meet the ‘normal’ rules for prudential borrowing. With just over 3,000 council homes built last year and the Government falling well short of meeting its ambitious target of 300,000 new homes a year, Mrs May decided to lift the shackles off local authorities. Initial estimates show that at least 10,000 new council homes a year will be built now, but there are hopes that figure could rise significantly. Already some 60 council leaders have pledged an immediate drive to build thousands more council homes signing an open letter vowing to use their new powers to borrow more money to build a new generation of properties. It has led to hopes of the biggest council house-building programme since the 1970s, when 100,000 new council homes a year were being built.
Challenge
“Solving the housing crisis is the biggest domestic policy challenge of our generation,” Mrs May told delegates at the Conservative Party conference. “It doesn’t make sense to stop councils from playing their part in solving it.” This announcement followed hot on the heels of her speech to the National Housing Federation, when she highlighted the central role she expected housing associations to play in building new homes and challenging the attitudes that hold us back. The Prime Minister announced an extra £2 billion in new funding to give HAs the long-term certainty they need to deliver tens of thousands of new affordable and social homes. As the first Prime Minister to address the NHF, Mrs May pledged to work in partnership with associations to get more people on the housing ladder and make sure those who cannot afford their own place also have somewhere they are proud to call home. We have also heard of the first allocations of £248m to pay for the removal of combustible cladding from social housing tower blocks. While it has taken more than 15 months since the tragedy of the Grenfell Tower, at least the tenants of councils and HAs living in high-rise blocks should soon be able to feel safer in their homes. These welcome moves come after decisions to ditch unpopular housing policies brought in by David Cameron and George Osborne, including forcing councils to sell off their most valuable homes and ending lifetime tenancies.
RTB changes
If the PM and her Housing Secretary James Brokenshire really want to endear themselves to the Local Government sector then they will go for a hat-trick and amend the Right to Buy rules – either by suspending the sale of council houses and flats entirely for a period, or increasing the amount of each sale receipt that can be spent on building a replacement home. In recent years it has been easier for councils to invest in the building of commercial space and shopping centres, than it has for them to pay for building council homes. This has helped produce a situation where councils spent almost £1bn last year on temporary accommodation for homeless families. Then if the Prime Minister could find a way to make Universal Credit more palatable to claimants and their landlords, then local authority leaders really do believe we would be entering a new ‘golden era’ for council housing. However, Labour’s shadow housing spokesman John Healey MP struck a more cautionary tone when he pointed out that the extra £2bn for HAs would not be available until 2021/22 and that it has taken the Conservatives six years to scrap the Housing Revenue Account borrowing cap on councils. He has called for more urgent help to solve the plight of homeless families, with over 120,000 children going to bed each night in temporary accommodation or on the streets.
By Patrick Mooney, editor