Government should raise Housing Revenue Account for local authorities to tackle housing crisis
- By reconsidering the borrowing cap for local authorities and re-introducing the Affordable Homes Guarantee Scheme, councils and housing authorities could do more to tackle the housing crisis.
- The Government can improve affordability for all by building more homes for all tenures and making grant funding available for social rented housing.
- Research comes as Treasury Select Committee announces their response to the 2017 Budget.
Research carried out by the New Local Government Network (NLGN) has found that affordable housing efforts would benefit from a reconsideration of the borrowing cap for local authorities. The increased capacity to borrow, among other measures, would give local authorities the autonomy to build housing where it is needed.
The research, commissioned by the National Housing Federation, outlines the collaboration between local government and housing associations, who are committed to providing affordable housing in line with current demand.
Adam Lent, Director of NLGN said:
“As the country faces the biggest housing crisis in a generation, local authorities are best placed to determine local demand in housing need and meet it.
“As such the Government should remove the barriers that prevents both housing associations and councils collaborating and innovating together.”
Comments made this week by the Treasury Select Committee, recognising that raising the cap would not impact national debt but could increase local housing supply, are very welcome. The NLGN report identifies practical models that could capitalise on such a policy change, with further recommendations that would see an increase in affordable housing stock.
While such changes could make an immediate difference, the report further highlights the need to develop a housing strategy beyond 2020, which looks beyond home-ownership to all types of tenure.
The report also recommends that:
- Local leaders, such as elected mayors, more proactively assemble and package up publicly-owned sites in ‘bundles’ for development across a city or area, with the view to drive quality development in areas which have traditionally suffered from low quality housing;
- The Government continues to implement the proposed rent policy (and increase) of CPI + 1% for social and affordable rents from 2020, as per the initial rent settlement, to allow housing associations and councils to invest in new homes with confidence; and
- The Government provides a clear and sustainable funding solution to supported housing as a matter of urgency, with a supported housing allowance set at a higher level than the Local Housing Allowance, and sheltered accommodation removed from the proposed policy changes.
Notes to editors
1. For further information, please contact Vanessa Schneider, Communications Officer on
07480 230 317 or firstname.lastname@example.org
2. The report is available here.
3. The research in this report was carried out between June and August 2017, and based on 171 responses from councils and 142 responses from housing associations. Responses were representative by region, type of council (excepting upper tier counties, which are not responsible for housing), and whether councils are stock-retaining or not.