Gordon Brown pledges 'extra help' for councils to build new social housing

Gordon Brown promised extra help for local councils to build social housing today as part of efforts to boost the UK economy out of recession.

Past restrictions could be lifted, the Prime Minister told town hall leaders, so long as reforms were also made to address issues such as the high levels of unemployment among residents.

Speaking after world economists warned Britain was likely to suffer worst among rich nations from the global slump, he insisted the country would get through the crisis.

Councils had a vital role to play in that, he said in a speech to the New Local Government Network.

"From the start I have said that we will not stand by when people's hopes and dreams of a good home and a good neighbourhood are threatened by economic forces beyond their control," he said.

"We will be ready to more whenever necessary and I believe that councils should be given greater opportunities to play a bigger role."

He went on: "Of course investment in social housing must be aligned with reform so that, for example, social housing providers working with local authorities and Jobcentre Plus address the high levels of worklessness that can be concentrated within this sector," he said.

"But today let me be clear: if local authorities can convince us that they can deliver quickly - and cost-effectively - more of the housing that Britain needs, and if local authorities can build social housing in sustainable communities that meets the aspirations of the British people in the 21st century, then we will be prepared to give them our full backing and put aside anything that stands in their way.

"We will not allow old arguments and old ideologies to stop us getting on with the job together when there are families that need homes, when there are bricklayers, carpenters and electricians ready and able to work, when there are construction companies that are ready to build houses.

"So in the coming months we will report on further measures to address housing supply, to support real need and we recognise the important role that local authorities can play alongside, of course, the social housing reform that will ensure a fairer system of all."

Mr Brown also said £100 million would be released from the local authority business growth incentive scheme "to help local authorities respond flexibly to the effects of the downturn in their area".

The Prime Minister made no reference in his speech to yesterday's bleak assessment of the UK's short-term prospects from the International Monetary Fund, which predicted the economy would shrinking by 2.8% this year, more than twice as bad as it previously thought and well above the 2% average for advanced countries.

He conceded that the country faced "great" challenges and a difficult year.

But he said: "Let me be clear and candid: with the action we are taking both here at home and abroad we will get through this and onward to the better times beyond.

"And we will do so together, marshalling all the resources at our disposal and uniting as a nation - central government, local government, businesses, trade unions - all willing partners working together.

"In the face of the chaotic collapse of global financial markets, we will act with purpose and determination to fight this global recession To address the fears that people have, and bring to them real help to ensure greater security in their lives."

The Prime Minister urged councils to take full advantage of the Government's fiscal stimulus to help spur the economy back to growth.

While councils are under pressure to achieve efficiency savings of 3%, he said he would also be asking the Audit Commission to report on town halls' responsiveness to the downturn.

"If there are ways that Government is unintentionally frustrating your efforts to respond appropriately, I want to know about them," Mr Brown said.

"And I pledge that we will act wherever, whenever we can do so to ensure for you and your authorities the necessary freedoms and flexibilities.

"Equally, local authorities should feel a similar obligation to do all they can, making full use of the capital expenditure from our stimulus to benefit your local communities.

"For, even as our communities are being battered by a global storm that is vast and seems far from our control, it is evermore important that local people are empowered within their communities to lead our response to the downturn."

The Prime Minister went on: "By acting together, as local authorities and national Government in partnership, we truly can bring real help to families and businesses when and where they need it most, offering greater security for homeowners, for businesses and for the unemployed, and with it the platform on which to build a recovery that will secure the future of the vibrant local communities on which the future of our whole society depends."

But Liberal Democrat Shadow Housing Minister Sarah Teather, said: “For years, Labour and the Tories have blocked councils’ attempts to build social housing and created the housing crisis we are faced with today.

“Now Gordon Brown has announced yet more months of delay, instead of helping the 1.77m families waiting for social housing now and kickstarting the struggling construction industry. 

“Instead of more dithering, the Government must inject serious funds into social housing right away to buy up land and unsold properties while the market is low.

“We need radical reform of how council housing is funded, so that tenants no longer pay an additional Tenant Tax to the Treasury and councils have the freedom to invest in new housing.”

Alan Walter, chair of the Defend Council Housing national campaign, said: “It’s clear that the private housing market has failed people miserably. Government and policy makers need to learn the lesson.

"Public money should be invested into first class public housing and any help to bankers and builders should be conditional on them supporting a massive programme to build a third generation of first class council homes.”

“As the Prime Minister recognises local authorities are ideally placed. They can provide first class council homes with secure tenancies, low rents and managed by an accountable landlord using the best building methods and designed to the highest environmental standards with good community and transport infrastructure. That’s what Britain needs for the 21st century!”

“It is good to hear the Prime Minister explicitly breaking with government’s past dogmatic discrimination against council housing.

"But it’s less clear what he means about ‘investment… aligned with reform’. Any attempt to introduce means testing or time limits on council ‘secure’ tenancies will be resisted.”

“It is now imperative that government ends the war on council housing and sits down with council tenants, trade unions, councillors, MPs and many housing professionals who support council housing to agree a common plan.

"Key will be agreeing a settlement for 2.5 million existing council tenants to the long running dispute over providing a ‘Fourth Option’.”

The Local Government Association (LGA) welcomed the announcements.

LGA vice chairman Sir Jeremy Beecham said: "The Prime Minister's backing for council schemes to build new houses is a positive move.

"The decision to release £100m of funds for promoting local business through the local authority business growth incentives scheme will be a shot in the arm for local economies and a boost to entrepreneurship.

"The LGA has been campaigning for this change and the Government's response will make a big difference."

He went on: "Council leaders will look forward to Government proposals for how they can be freed up to do even more to help local people and businesses through the recession.

"Small changes can make a big difference. The LGA has proposed a series of easy to introduce measures, such as an overhaul of tax breaks for small businesses and council tax benefits for struggling homeowners, that could make a real difference.

"At this time of repossessions and redundancies, even more people need the vital support that only councils can provide. Town halls are taking decisive action to protect local people and businesses from the worst effects of the recession.

"They are helping to keep people in their own homes, offering support to the unemployed and helping small companies stay afloat."

Caroline Spelman, shadow communities and local government secretary, said: "Rather than helping local economies, Gordon Brown's tax policies are hammering local firms.

"Business rates are to rise by 5% in April despite negative inflation; new empty property business rates are taxing buildings which can't be rented out; ports are being hit with retrospective business rates; and supplementary business rates are on the way.

"Labour's policies are pushing local firms to the wall."