The UK desperately needs an increase in house building. So why doesn't the government abolish the cap on borrowing for housing purposes and let councils rely on the Prudential Code instead?
Being a Liverpool fan, I have joined in the mirth over the unsavoury incident on Sunday that demonstrated raw passion unfortunately leading to unacceptable behaviour. One of my favourite books, Eats, Shoots and Leaves, immediately came to mind.
But there are parallels in the world of social housing. We seem to have the raw passion of a certain political persuasion for ‘doing down’ the public element of the social rented sector. This is leading to actions that are causing immeasurable damage at both the society and individual level. Homelessness is rising, benefit changes are seeing public sector rent arrears increasing, people are resorting in ever greater numbers to food banks and some are saying that social unrest is becoming more likely.
We all know that there is a housing crisis in the country. We all know that getting house building going has an extremely beneficial effect on the economy. Most of the public sector is aware that the Housing Revenue Account has now been given back to local authority control (as many are trying to think up ways to raid it to save their services). So why don’t we put these together and take the brakes – the cap on borrowing for housing purposes – off and rely on the Prudential Code for borrowing that has so effectively governed local authority capital expenditure in recent years?
The government will undoubtedly point to the 0.3% growth in the first quarter as a sign that it is getting things right. But the Dwelling Stock Figures for England released yesterday suggest that actually the rate of increase of properties is slowing – i.e. there was a smaller increase in available houses last year than there has been in any year this century. Yet the number of households is increasing.
These figures also show the inexorable rise in the private rented sector continues, now easily outstripping the social rented sector. No wonder the benefits bill is increasing as the number of involuntary (cannot sell their house) landlords rises; banks, whilst gaining yet more taxpayers money, seem to be encouraging buy to let mortgages whilst others seeking a foot on the property ladder struggle; and the Local Housing Allowance (the limit on the benefit that can be paid to someone renting privately) continues to be greater than equivalent benefit in social housing.
So perhaps our politicians should concentrate on looking at some simple solutions that will bring real benefits to the economy; to those seeking a home – either to rent or to buy; reducing the burden on taxation and allowing local authorities to demonstrate that they are best placed to judge the needs of their communities.
Far better for them to do this than allowing themselves to be drawn into moralising on an incident in a football game. Because if they don’t, then many unhappy, struggling strivers may just take action, and housing policy may come back to bite the current government.
Ken Lee is chair of the CIPFA Local Authority Housing Panel and director of resources at Wigan and Leigh Housing Company
