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Osborne urged to remove borrowing cap and give councils freedom to build new homes

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Osborne urged to remove borrowing cap and give councils freedom to build new homes

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Published by Jon Land for 24dash.com in Local Government and also in Central Government, Housing

Osborne urged to remove borrowing cap and give councils freedom to build new homes Osborne urged to remove borrowing cap and give councils freedom to build new homes

Chancellor George Osborne has been urged to use his Autumn Statement to remove borrowing cap so councils can build new homes.

The Local Government Association says parts of the country with tens of thousands of families languishing on social housing waiting lists are being prevented from building new council housing.

The LGA is warning that Treasury restrictions on what each council can invest in housing are severely hampering their ability to tackle the ongoing housing and homelessness crisis.

Government has set caps on what each council can borrow to invest in new homes. At least nine councils are unable to borrow anything at all. Between them these areas have about 40,000 households on social housing waiting lists. Nationally there are 1.8 million households on waiting lists for social housing.

The LGA, which represents councils in England and Wales, is urging the Chancellor to use this week's Autumn Statement to lift the housing borrowing cap and allow councils to invest in housing under normal responsible borrowing guidelines.

Up to 60,000 additional new homes could be built over the next five years if government lifted the cap. Market analysis has shown that the investment would be very low-risk and paid many times over by future rents on new homes.

Cllr Mike Jones, Chairman of the LGA's Environment and Housing Board, said: "There are millions of people on social housing waiting lists and councils want to get on with the job of building the new homes that people in their areas desperately need.

"Local authorities have excellent credit ratings and we want to use our assets to help kickstart the housing recovery but our hands are being tied.

"The Chancellor has an unrivalled opportunity to use this Autumn Statement to create jobs, provide tens of thousands of homes and help the economy without having to find a single extra penny.

"New homes are badly-needed and councils want to get on with building them. The common sense answer is for the Treasury to remove its house building block and let us get on with it.

"Councils could build up to 60,000 additional new homes over the next five years if the Treasury removed the housing borrowing cap and allowed councils to invest against normal borrowing guidelines."

Government has set each council a different cap on the amount it can borrow to invest in new housing. Most councils are prevented from being able to borrow to build as many new homes as they need.

The following councils have been given no borrowing headroom;

  • Darlington Borough Council (2,068 on housing waiting list)
  • Dudley Borough Council (6,687 on housing waiting list)
  • Exeter City Council (4,300 on housing waiting list)
  • Gosport Borough Council (3,054 on housing waiting list)
  • Harrow Council (3,953 on housing waiting list)
  • Royal Borough Greenwich Council (11,656 on housing waiting list)
  • South Cambridgeshire District Council (1,593 on housing waiting list)
  • Waverley Borough Council (2,697 on housing waiting list)
  • Woking Borough Council (1,801 on housing waiting list)

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