LGA: PM’s housing £2bn needed now and for councils too

19 Sep 18

Funding to build more housing should go to councils – not just housing associations – and must be made available now, council leaders have urged.

Theresa May announced today £2bn would be made available for housing associations to give them the “stability” they needed to get “tens of thousands of affordable and social homes built”.

In an endorsement of the housing association sector she said it was able to “achieve things neither private developers nor local authorities are capable of doing”.

The “most ambitious” housing associations would be able to draw down the funds from 2022 until 2028-29, the prime minister told the National Housing Federation summit today.

But Gary Porter, chair of the LGA, responded: “Homes for affordable and social rent are desperately needed across the country now, not in 2022, and the measures announced today fail to provide the funding certainty councils also need to play a leading role in solving our housing crisis.”

He added that the prime minister was “wrong to suggest that councils are not capable of building the new homes at scale without recognising they are being hamstrung by Treasury restrictions which prevent them from borrowing against their existing housing stock.”

The LGA has long campaigned for restrictions on council borrowing to be lifted to allow them to access more funds to build homes.

Chancellor Philip Hammond did say he would lift housing revenue account borrowing caps in the Budget last year for councils in areas of “high need”.

Porter said that the government’s “renewed emphasis on social housing” must be backed up in next year’s spending review.

The Liberal Democrat housing spokesperson Wera Hobhouse agreed councils also needed money to build.

“Ministers must take the housing crisis seriously and empower local councils to build,” she said.

Labour criticised the announcement as falling “far short” of what was needed by the social housing sector.

Labour MP David Lammy wrote on Twitter that the £2bn was a “drop in the ocean” to solve the housing crisis.



May told the conference today the £2bn would allow housing associations to “leverage the private finance you need to build many more”, saying this was the first time any government had offered the sector such long-term certainty.

Although, housing commentator Jules Birch suggested on Twitter it might not end up being ‘new’ money.


May also told the NHF conference she wants to change public perceptions, claiming there was still a “stigma” attached to social housing and many people including politicians “continue to look down on [it]”.

“Whether it is owned and managed by local authorities, TMOs or housing associations, I want to see social housing that is so good people are proud to call it their home,” she said.

Part of the problem was because of the physical buildings themselves, she said, and charged housing associations with the responsibility of creating mixed communities and delivering the “quality of social homes the people of this country deserve”.

“As you look from building to building, house to house, you should not be able to tell simply by looking which homes are affordable and which were sold at the market rate,” the prime minister told her audience.

Other reactions to Theresa May’s announcement:


Polly Neate, chief executive of Shelter, said: “This must be the start and not the end. What we need now is more social homes actually being built as well as a big shift in attitude to start viewing social housing as a right for hard pressed families across the country.”


David Orr, chief executive of the National Housing Federation, said: “The announcement of £2bn of new money for social housing is extremely welcome- but the really big news here is the prime minister’s long-term commitment to funding a new affordable homes. This represents a total step change.”


Gavin Smart, deputy chief executive of the Chartered Institute of Housing, said: “Long-term partnerships will enable more housing associations to take the lead in developing their own land and reduce their reliance on private developers, helping to boost the numbers of new homes we build as a nation.”


Dan Tomlinson, policy analyst at the Resolution Foundation think-tank, said: “The reality is that home ownership will remain far to distant a dream for many young people, who are likely to remain renting for some time. So it’s good to see the prime minister signalling a shift in attitudes towards renting by reforming tenancies in the private rental sector”.


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