Your browser is no longer supported

For the best possible experience using our website we recommend you upgrade to a newer version or another browser.

Your browser appears to have cookies disabled. For the best experience of this website, please enable cookies in your browser

We'll assume we have your consent to use cookies, for example so you won't need to log in each time you visit our site.
Learn more

May’s £2bn will not deliver a ‘new generation’ of council homes

  • Comment

LGC’s essential daily commentary on the prime minister’s big speech to Conservative Party conference.

The prospect of what was billed as a significant announcement on social housing in the prime minister’s speech to the Conservative Party conference today caused much excitement when it emerged late last night.

The Sun reported that Theresa May was preparing to be the first “PM in decades to announce a major programme to build council houses”. On the Today programme this morning Ms May’s de-facto deputy Damian Green said the government was “going to make it easier for councils to build new houses”.

Hopes were raised. Even BBC political editor Laura Kuenssberg speculated ministers could be about to lift the cap on councils borrowing to build more council homes.

But alas the announcement, when it came towards the end of a painful-to-watch-speech which Ms May coughed and spluttered her way through, was fairly underwhelming: an additional £2bn for affordable housing, which councils and housing associations can bid for.

A Conservative Party press release accompanying the announcement suggested this could facilitate the building of up to 25,000 new homes for social rent, based on a subsidy of £80,000 per home.

Even if this did materialise it would only equate to an increase in the council housing stock of about 1.5%, not exactly major, or amounting to the “new generation of council homes” that Ms May said would “help fix our broken housing market”.

Further, the small print suggests it is unlikely that all of the £2bn will go towards new council homes as only councils in areas where “rents are high” will be able to bid for funding to build homes for social rent as opposed to regular affordable homes. There is no further detail at this stage on at what point rents will be deemed “high” by the government.

In addition councils will be competing for a share of the cash with housing associations, many of which have more recent experience of building new homes and may well be able to get shovels in the ground more quickly.

And don’t even ask about the right-to-buy (mainly because nobody yet knows whether the policy will apply to the homes built with these funds).

Speaking to LGC earlier, Local Government Association chair Lord Porter (Con) said the most encouraging part of the announcement was the change in tone and the explicit recognition that council housing had a part to play in building new homes.

It is possible this new tone could be important in terms of the prospects for the housing deals some areas are currently discussing with government, which could see borrowing freedoms relaxed on a case-by-case basis.

Yet, it seems a massive missed opportunity. At the Conservative conference this week there was a recognition among much of the rank and file that radical action is needed on housing. LGC reported yesterday on housing minister Alok Sharma’s warning at a fringe meeting that unless the party addresses the current unfairness in the system it would be in “trouble” come the next election.

At the same fringe there was little enthusiasm for the extra £10bn investment in Help to Buy, except from the chief executive of Barratt Homes. Communities secretary Sajid Javid has described the investment, along with the measures he announced on tenants rights in his speech, as intended to alleviate some of the pressure on people in the short term, while we wait for a “step change” in the delivery of new homes.

Based on today’s announcement we could be waiting a while.

  • Comment

Have your say

You must sign in to make a comment

Please remember that the submission of any material is governed by our Terms and Conditions and by submitting material you confirm your agreement to these Terms and Conditions.

Links may be included in your comments but HTML is not permitted.