“There are no strings attached.” That is the unambiguous response from the Ministry of Housing, Communities & Local Government to LGC’s natural scepticism that ministers really have had an epiphany about the importance of council housing.
For once, it really seems the government really has seen sense: the prime minister has decided to lift the cap on councils borrowing on their housing revenue accounts. Of course, tapping the potential of councils is a glaringly obvious (partial) solution to England’s housing predicament: the market has not been delivering; ever greater numbers of people are being priced out of many regions and homelessness is rising rapidly. However, Theresa May and James Brokenshire deserve credit for changing course.
As one ministry source told LGC, the ball is now in local government’s court. Councils (both Conservative and Labour) have been crying out for freedom to build and they are now about to get it. Councils have been unable to fulfil one of the most basic functions of a place-shaper: they have generally not been able to provide high-quality, affordable housing. They now have a new tool to prevent unbalanced communities in which there is no accommodation for the young, poor and those in lower paid, yet essential, jobs.
However, it is not necessarily easy for councils to take advantage of this new power. They have lost the skills they previously had in relation to building. In many cases they have little land, and those in the strongest position to borrow using their HRA are not necessarily the ones requiring the most housing. None of this detracts from the fact that councils must not let their residents down. Now is the time to be bold.
Lord Porter (Con), the Local Government Association chair and a key figure in the campaign to get ministers to axe the cap, has this ambition, predicting councils will build 100,000 homes a year during the next parliament. Each council should be similarly eager. Their sector built 129,000 council homes in 1969-70, so why not now, or at least in a few years once they have regained lost skills?
None of this is to say that councils are the only potential housing providers. Many housing associations provide a strong service. And homeownership is, of course, a legitimate aspiration. However, fewer families have mortgages than they did a decade ago; in recent years it has been the private rental sector – generally far more costly than social housing – which has grown most.
Margaret Thatcher’s dream of a home-owning democracy has been on the wane as council homes bought under right-to-buy have indirectly moved into the buy-to-let sector. So far nothing has been done to end right-to-buy’s corrosive impact. The axing of the cap is only half of the solution: right-to-buy must end too, at least in its current form. Councils cannot be expected to build houses, only to give them away at a subsidy and retain just a small proportion of the receipts to build more homes. Until right-to-buy is curbed, there is no certainty that the renaissance of council housing is nigh.