Doubts raised over council house-building revolution

By Dan Peters and Martin Ford | 06 November 2018

Doubts have been raised over the anticipated council house-building revolution promised by ministers after figures suggested the Government’s predictions may be over-ambitious.

The figures come as it emerged that the Government had earmarked at least 80% of the cash from five key housing programmes for projects in areas facing the highest affordability pressure, leaving just 20% for the rest of the country to bid for.

A Ministry of Housing, Communities and Local Government policy paper quietly published last week suggested that billions of pounds will not be available for many areas beyond London and the south-east.

The policy paper read: ‘We recognise that the pressures faced in buying a home do not affect the whole of the country in equal measure.

'It is right that Government funding is directed to address affordability where it poses the greatest problem for the country so homes can be built where they are most needed.’

A housing source said: ‘I suspect local authorities may kick off once it trickles down.’

Executive director of East Midlands Councils, Stewart Young, said: ‘Many will just sigh with a bit of frustration at a lost opportunity.

'It’s probably another decision to confirm that the East Midlands is the lowest funded region.

'If the decision has been made to dampen the heat in the London property market it’s not going to touch the sides.’

Leeds City Council leader, Cllr Judith Blake, added: ‘We need a sustainable approach to the overall needs of our towns and cities that doesn’t just use blunt measures of land value or the affordability of mortgages as the only indicators of housing need and growth potential.

‘The current proposal is likely to further consolidate the economic gap between London and the south-east and the rest of the country.’

Housing secretary James Brokenshire believes councils will be able to build up to 10,000 homes a year after prime minister Theresa May scrapped the Housing Revenue Account (HRA) borrowing cap.

However, a poll of 50 councils by public sector procurement firm Scape Group found they only expected to complete up to 1,000 new homes within a decade due to capacity and skills shortages.

Last week, the Office for Budget Responsibility predicted just 9,000 more homes will be built over the next six years following the removal of the borrowing cap.

Appearing before the Housing, Communities and Local Government Committee, housing minister Kit Malthouse conceded he was not expecting a flood of homes in the short-term.

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