Labour Party conference: councils should use HRA reforms to build more homes
By Richard Johnstone in Manchester | 3 October 2012
Ed Miliband will lead moves to encourage Labour-led councils to build more homes under the new housing finance arrangements.
Shadow housing minister Jack Dromey told a fringe event at the party’s conference yesterday that a ‘housing summit’ would be held later this year to set out best practice from across 20 Labour authorities. Other councils could then ‘learn from the lessons of others’, he added.
The meeting would set out what town halls can do to build more homes now rather than ‘waiting on what we might do in 2015’ when the next election is due.
‘We’re going to be launching in the autumn at a housing summit – to be launched by Ed Miliband – what we call an innovation network of 20 of the best Labour authorities,’ Dromey said.
‘The idea of that is building upon some really good things that are already happening in local government.’
The summit will outline the ‘progress’ that can be made by working with organisations in the building and construction industry, Dromey said.
He highlighted last week’s announcement that Labour-led Manchester City Council had signed a deal with the Greater Manchester Pension Fund to invest in new homes. An investment by the local authority pension fund, the first of its kind in the country, will finance construction of more than 240 new homes for sale or rent at five sites provided by the city council. The partnership will choose a contractor to build the homes and a property manager to manage the rented properties.
‘[The summit] will be focused on how a dynamic local authority, like Manchester, is using Housing Revenue Account reform, planning, land, innovative financial models – and there are some fascinating ones already and potentially some other fascinating ones in the next stages – and partnership agreements with housing associations, builders and developers,’ Dromey said.
There was a ‘great deal of interest’ from developers on extending the Manchester model, he added. ‘We have had a host of constructive discussions with the representatives of the housing associations, of builders and developers.’
Proving that councils could make effective use of existing powers could lead to 'further freedoms' for local authorities from a future Labour government, he stated.
Following the abolition of the national HRA subsidy system on April 1, local councils now retain their rents in exchange for taking on a proportion of the historic housing debt. However, the total housing debt taken on by a council acts as a cap on housing-related borrowing in future years.
Dromey told the fringe meeting that he would like to go further. 'HRA reform started under Labour and I welcome the fact it was continued under this government. But I‘m actually in favour of yet further freedoms for local government so they can operate in collaboration with other key players. But I think the best way of achieving that is to demonstrate that over the next couple of years [councils have] made a real difference.’