Michael Donnelly, PlanningResource, 18 March 2010
Council finance shakeup 'could supply 50,000 homes'
Allowing councils more freedom over their finances could allow them to build up to 500,000 new homes over the next decade, according to the Local Government Association (LGA).
A five-point plan published by the LGA today calls for root and branch reform of the way social housing is funded to meet the demand for homes.
The LGA says councils believe there is huge scope for building affordable homes, redeveloping existing properties, refurbishing homes and using former industrial sites if they are allowed to keep income for council house sales and are given full control over housing budgets.
It is calling for councils to be allowed:
- Freedom to manage the finances of their own housing. The LGA estimates reform could allow councils to build 300,000 homes over 10 years.
- Power to keep income from selling existing council homes. Councils can keep cash from selling newly built homes under the right to buy legislation, but funds from the sale of older properties goes to the Treasury. Allowing councils to keep that money would allow them to build up to 150,000 homes over 10 years.
- Access to funding for affordable homes on the same terms as housing associations and private developers. Councils are currently barred from raising cash to build homes on the open market.
- Changes to the local government grant system so councils get money more quickly to pay for facilities like schools for people who move into the area when they build homes.
- New freedom to develop roads, schools and other facilities at the same time as homes.
Cllr Gary Porter, chairman of the LGA Environment Board, said: "Councils up and down the country want to provide much-needed affordable homes for people and have been pressing for practical changes to the way things are run to let them do that.
"It is good news that the government is consulting on far-reaching reforms of the way council housing is funded and we look forward to seeing their proposals soon.
"Town halls want nothing less than a renaissance in council house building to meet pent-up demand for homes that low income families desperately need.
"With house prices rising once more it is increasingly difficult for people with modest incomes to buy a home. Councils know this is a problem and have been campaigning for years to deliver homes for residents."