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Bernstein calls for ‘significant incentives’ to fix housing markets

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Former Manchester City Council chief executive Howard Bernstein has branded the government’s latest housing reforms “conventional” and called for more radical devolution on housing.

Howard bernstein

Howard bernstein three by two

Sir Howard said the housing measures announced in the Budget, including stamp duty reform and an uplift of council borrowing limits for housing, was “not going to get the nation very far”.

Sir Howard, who retired from the city council this spring after almost 20 years in the top job, told LGC: “Local government’s functions have been significantly limited and unable to secure a strong public service focus on people; devolution is the answer to some of those problems.”

He welcomed the announcement in the Budget of further devolution deals, but added: “The announcements around housing… are pretty conventional.

“If you really wanted to tackle dysfunctionality in housing markets, you’ve got to look at those housing markets individually. You’ve got to address the regulatory systems around supporting social housing providers to make progress. You’ve got to address the impacts of stamp duty in different housing markets. [You should be] creating fluidity and turnover in the housing markets.

“I was surprised to read that the big Budget announcement [was] about first-time buyers receiving a 100% discount on stamp duty. That’s not going to get the nation very far, is it? We need a fresh approach to devolution, with significant incentives to local places to drive housing markets.”

Sir Howard said there were several areas in which a less centralised approach from the government would improve outcomes for people.

“It’s the same principle around skills and transport; we’ve got to think of different ways to drive up investment,” he said.

“Because of our conventional approach to accounting for public expenditure, and our central control of policies and programmes, we always ask ourselves, ‘why are we still not delivering our outcomes?’ It’s because we’re not willing enough to rethink the constitutional relationship between local government, mature business leadership and central government.

“All of that will be brought into sharper focus [by Brexit]. Unless we start to rethink how we will be outward-facing and tackle these underlying problems, we’re not going to be much further along.”

Some authorities are preparing for Brexit by attempting to market their places individually to international investors. Sir Howard was instrumental in attracting Chinese investment into Manchester, but he stressed that when courting international backers, councils had to be clear about their offer to investors.

“We need to think about what we’re making international connections for,” he said.

“It’s easy to say ‘we’re off to China’, and those are important connections, but we’ve got to understand the nature of [our] priorities and how they match with [investors’] priorities. We’ve got to focus on those centres of potential global distinction [in the UK].”

Sir Howard highlighted “life sciences, nuclear and advanced materials” as the sectors in the north that “will be and are attractive to international investors”.

“We must be absolutely clear about the nature of propositions and sometimes we miss that step out,” he said.

On councils’ role in driving economic growth more generally, Sir Howard said: “There is a reluctance on the part of government to support local democratic institutional development,” referring particularly to the government’s decision to make local enterprise partnerships the driving force in the industrial strategy.

“Everywhere is different,” said Sir Howard. “Some LEPs are very good and provide excellent place-based leadership, and I heard stories where the opposite is true.

“We’ve got to create room for a flexible approach to different places. We have to have the scope for individual places to come up with their own structures to suit their needs. I’m not too worried about organising everyone so they fit into a one-size fits all approach to governance.”

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