Quickly does it
First Published 03 September 2016
Councils will need to move fast if they are to regain their role as providers of housing, says Jeremy Beecham.
John Healey’s announcement about council house building and a radical overhaul of housing revenue accounts is a welcome, if long overdue, rebalancing of government policy.
For more than a generation, housing policy has concentrated on issues of finance, tenure, and management at the expense of housing needs -witness the Tories’ Housing Finance Act of the 1970s, their council house sales programme and deregulation of the private rented sector, and Labour’s reliance on the regulated social landlord sector, restructuring of council house rents and reluctance, up till now, to countenance council building.
At least Labour has invested heavily in the decent homes programme and this year halved the anticipated rise in council rents. But the national obsession with home ownership, and latterly buy to let, has left us with another set of problems -negative equity, a decline in house building and empty apartment blocks littering our towns and cities.
The quality of much housing built in the past 30 years has been dismal, with new-build flats and houses shrinking in size to become much smaller on average than in most developed countries. Gone are the days of Parker Morris standards, though perhaps they, like council building, might be revived.
Welcome though the new approach is, we must keep it in perspective. The budget devoted ½ per cent of the £1 billion directed to housing to new build, which would allowed councils to build about 900 new homes, and even then securing funding via the Homes and Communities Agency has been difficult.
John Healey’s announcement increases the total to some 3,600 over two years, funded, it is believed, by transfer of unspent capital allocation from CLG’s non-housing resources and other departments.
To put this in perspective, in the year before I was first elected to Newcastle council in 1967, the council built 3,000 houses and flats. In 1974 at a time of deep recession in the construction industry, we bought 546 properties, built, half-built or planned, from private developers. Ironically, most of these were subsequently lost to the social rented sector under right to buy.
Even now, the HCA is set to reclaim funding on newly built properties which are subsequently sold under right to buy (which makes financing more difficult). It’s surely essential that the right to buy, or at the very least the accompanying discounts, is not applied to the new programme.
Meanwhile, we will have five million people on waiting lists by 2011. The building programme needs expanding, not only to meet this need, but also because of the potential impact on national and local economies.
Prudential borrowing should be made easier, innovative financial approaches such as bond issues could be piloted, and any surpluses whether in HRAs or from asset sales kept locally and ring-fenced to affordable and social housing development.
Healey’s statement appears to open the way to such policies, but the Treasury, for reasons not immediately apparent, appears to be sceptical about the capacity of councils to lead a new housing drive. That has to change. A good start would be if the Treasury released the £200 million held as a result of council housing surpluses remitted to Whitehall.
Councils will need to act promptly and efficiently to regain their rightful place as providers, bringing land forward and working, where possible, with the HCA and developers, private or social. They will also need to be more vigorous in using the powers conferred by the government to tackle problems in the private rented sector -from empty dwelling management orders to licensing schemes.
Anecdotally, there appears to be evidence that the processes for both are unduly cumbersome, and should be simplified. It will be interesting to see how long it takes for a pair of flats in my own ward, empty for 20 years, to be brought back into use now that my (Lib Dem) council has at last got round to using the powers created a couple of years ago.
But councils must also be more robust in terms of design and space standards, and planning permissions, especially for apartment blocks. They could perhaps look at the possibility of encouraging universities and colleges to take over some of these increasingly empty developments for student housing on the basis that this will release much needed family accommodation now occupied by students in many of our cities.
And what of the Tories? Their main proposal, under the guise of localism, is to dismantle any concept of planning for house building other than at the level of the individual council, incentivised by allowing councils to retain ensuing council tax proceeds.
New development outside the immediate confines of some at least of our metropolitan areas will be required if we are to avoid overdevelopment and long waiting lists, within them, and some areas will have to accept their share of it. The Tories’ record, and what passes for their new policy, offers little hope for those in housing need or who are already in the social rented sector.
Sir Jeremy Beecham is vice-chairman of the Local Government Association.