Councils call on Government to make housebuilding 'a reality'

Councils are enthusiastic about building new homes and have challenged Government to overcome barriers that are currently standing in their way.

The appetite among local authorities to build new properties was apparent when more than sixty councillors and senior officers came together for a panel debate at the House of Commons on March 26.

The event, Financing council newbuild: from words into action, was organised by the Association for Public Service Excellence (APSE) and the Association of Retained Council Housing (ARCH) following Prime Minister Gordon Brown’s commitment to enable councils to play a bigger role in providing new homes and address barriers stopping them doing so.

The event preceded Housing minister Margaret Beckett’s pessimistic pronouncements about meeting Government targets for three million new homes by 2020.

The Minister’s special advisor heard a ‘wishlist’ from councils keen to make building a reality. Councils present called upon the Government to: 

• Secure receipts from Right to Buy sales for investment in new homes.
• Enable borrowing against future rental income to take place outside of the Public Sector Borrowing Requirement, within a robust fiscal framework, in line with other European countries.
• Apply a broader scope, less bureaucracy and greater freedoms to current proposals for changes to revenue and capital rules.
• Provide pump-priming resources from the Homes and Communities Agency.
• Provide a level playing field with other social landlords in terms of access to Social Housing Grant.
• Reform the Housing Revenue Account subsidy system, which is currently under review, to enable council building to take place.
• Allow historic debts – which have been repaid several times over  – to be kept separate from new debts incurred to build new homes.
• Enable councils to own and manage developments directly rather than having to use complex special purpose vehicles.

APSE chief executive, Paul O’Brien, who chaired the debate, said: "Ministers have talked about significant levels of council building for the first time in generations and this is an immediate way of addressing housing shortages while boosting the construction industry.

"Councils have land ready for development, good credit ratings, are democratically accountable and ideally placed to link building with wider social, economic and environmental goals.

"They must have a level playing field with other housing options, however, in order to realise their undoubted potential in this time of national crisis."

The House of Commons debated featured; Nick Palmer, MP for Broxtowe, Councillor Gary Porter, housing portfolio holder on the LGA Environment Board; Sukvinder Kalsi, assistant director finance, Birmingham City Council; and Ken Florey, head of service finance, Wandsworth London Borough Council and advisor to ARCH.

It was followed by a presentation by Adrian Moran of the Homes and Communities Agency and detailed workshops at the Local Government Association headquarters.