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Porter: End of HRA cap my 'legacy to local government'

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Lord Porter has described the prime minister’s announcement of an end to cap on council borrowing against the housing revenue account (HRA) as “his legacy to local government”.

The chair of the local Government Association, whose maximum four-year term of office is due to end in July next year, said an end to the borrowing cap has been his personal “holy grail” since he joined the LGA’s housing board 14 years ago.

Talking to LGC yesterday, and clearly in an upbeat mood following the announcement, he referred to the cap alongside his success at ensuring his preferred choice of refreshments are available at LGA receptions.

“[The lifting of the cap] is perfect, it’s bang-on.

“We’ve now got fish, chips and beer at our receptions and there is no debt cap now on our HRA - they are my legacies to local government. I can’t overstate how important this is.”

Theresa May’s surprise announcement at the Conservative party conference in Birmingham has been widely welcomed by local government, but relevant Whitehall departments are yet to reveal when the cap will be scrapped and whether there will be conditions imposed on councils.

In a statement last night, the Ministry of Housing, Communities & Local Government said the cap would be lifted as “soon as possible”, with more details due in the budget scheduled for 29 October.

The Ministry added that lifting the cap would deliver an estimated 10,000 additional homes a year.

However, Lord Porter said councils would be able to “re-mortgage” more than a million houses and deliver an estimated half a million homes over the course of the next parliament. Charity Shelter estimates there are 1.1 million families and individuals on the waiting list nationally.

He said: “We’ve blamed [the government] for not letting us build, but now we’ve got to do it or else they’ll blame us for not delivering units.

“We’ve got people sitting on housing waiting lists around the country, so now we’ve been given the tools to go and do it, We need to get on and do it and it needs to be at pace.”

Lord Porter said some areas would not benefit from the end of the HRA borrowing cap as they had transferred their entire housing stock. A snap analysis by LGC suggests more than a third of councils do not have an HRA.

Lord Porter said those councils had “made a conscious decision” and made it clear “they don’t want to have council houses”.

District Council’s Network chairman John Fuller (Con) is leader of South Norfolk Council, which does not have an HRA.

He said: “[Councils] transferred their housing stock for good reasons and we want to see if those councils can now participate.

“Local leadership has been throttled by a lack of fiscal tools.”

This story was updated to correct the reporting of Lord Porter’s estimate of the timeframe in which 10,000 homes could be built. LGC apologises to Lord Porter for the error. 

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Readers' comments (1)

  • yes its a big achievement. But we also need revenue funding to meet the revenue cost in keeping rents below market levels, or hra's will quickly run out of money. We also need to end the far to generous right to buy discounts so stock borrowed against is not lost. Then we need an expanded supply side so 300k homes can be build a year. Maybe the state could transfer 5% of the green belt at farm land prices to councils and we could finish the job of providing enough homes where people need them close to jobs.
    Sorry got carried away

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