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Keep calm and carry on… making the case for a greater housebuilding role

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LGC’s essential daily briefing

Sajid Javid is consistent if nothing else.

After he became communities secretary he said he was going to make housing his top priority, and it is pretty much the only issue the sector hears him speak publicly about at length and in any great depth.

For those wanting to hear more from him about what the government intends to do regarding the social care crisis, devolution, or local government finance reforms are largely left disappointed (although, to be fair, he has been a bit more vocal on the latter issue of late).

So it was no surprise to see Mr Javid on primetime political TV yesterday highlighting the housing crisis. Again.

A lot of what he said the sector has heard many times before, but his pitch to borrow more money (up to £50bn if The Sun is to be believed) to help build more housing offered a welcome change in tone from the monotonous messages about austerity we have been accustomed to hearing from ministers since 2010.

Such was its significance that it led to some over-excited headlines in the media, such as this in the Guardian: ‘Housing crisis: we will borrow to invest in new homes, says Sajid Javid’.

It all sounds very promising, especially after an encouraging summit about housing at 10 Downing Street last week which left Local Government Association chair Lord Porter (Con) with the impression that councils could be given an even greater role in housebuilding in the future.

But there are a few reasons to be cautious.

For a start, Mr Javid spoke of borrowing more money “to invest in the infrastructure that leads to more housing”.

Read those words carefully: “to invest in the infrastructure that leads to more housing”.

The meaning is quite different to lifting the borrowing cap for councils and investing money in building new homes directly.

A report in City AM adds further weight to the suspicion that Mr Javid’s proposal is more to do with the government investing in specific projects than unleashing a new wave of council housebuilding. The publication understands borrowed funds “could be used on projects such as the so-called Oxford-Cambridge corridor, a plan to install rail and road links that developers need to create new homes”.

The lesser reported comments Mr Javid made on TV yesterday also point to beneficiaries from any potential borrowing being predominantly outside the sector.

This is despite the fact he said there was an urgent need to build up to 300,000 homes a year, drawing references to the housebuilding heydays for councils (and in turn the country) in the 1950s and 1960s.

But when that was pointed out and Mr Javid was asked if funds would be handed over to councils to build new homes, the communities secretary said: “No of course not. It can’t all be council housing.”

The fact a £2bn fund announced by the prime minister earlier this month will hardly deliver any council housing appears to be beside the point.

But even if that £2bn is a “down payment”, as Lord Porter believes it is, and Mr Javid does intend for at least some councils to get direct control of a share of some of the extra borrowing he is proposing, then there’s just the small matter that this whole proposal does not appear to have got the sign off (yet, anyway) from the Treasury.

As much as Mr Javid should be applauded for consistently attempting to address the housing crisis, he and his colleagues should also be criticised for consistently missing the obvious answer to this particular issue.

If the Conservatives really do believe there is a housing crisis in this country it is surely time the party stopped tinkering around the edges and gave local authorities the borrowing freedoms they need to get Britain building again.

As Lord Porter put it last week: “It’s not like you’re paying an electric bill with it – you’re building infrastructure and an asset for the country.”

What’s not to like? Well, the fact those homes will probably be subject to the right-to-buy but that’s another issue… At least if councils are building more homes then more people will have an opportunity to actually buy and live in one.

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