18 May 2007
Councils are gearing up to resume their role as significant house builders after senior Labour figures said they were vital to increasing the supply of new homes.
Gordon Brown is making housing a key feature of his campaign to become prime minister, and this week promised five eco-towns, each with up to 20,000 new homes, on brownfield sites in Southeast England. The towns would include low-cost homes for young families and rented social housing.
Councils with arm's-length management organisations can apply for Housing Corporation grants this autumn.
Housing minister Yvette Cooper has promised that bids by authorities using special venture vehicles to raise finance will also receive fair consideration.
'It is time for local councils to play a stronger role with housing associations and developers to build mixed communities for the future,' she said. 'I believe councils need more flexibility to use their assets to help deliver the new homes and communities we need.'
Cooper, who is tipped for promotion in a Brown government, told the Commons communities and local government select committee last month that high-performing councils might be allowed to build homes outside the housing revenue account and keep rent income to cover borrowing.
Ministers are keen to make greater use of local authority-owned land, but any break-up of the HRA system depends upon a pilot involving six councils, which is due to wind up before the Comprehensive Spending Review.
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