Making ‘build, build, build’ a reality

17 May 2021

The elections are done and dusted. Whatever shifts have occurred in the political landscape, local government’s top priority remains supporting our communities and securing the post-pandemic recovery we all want to see.

London boroughs are resolute that addressing the housing crisis is an integral part of this.

The capital has long suffered the most severe housing pressures in the UK. London boroughs collectively have a quarter of a million people on our housing waiting lists. An estimated 165,000 homeless Londoners live in temporary accommodation – around two-thirds of the national total.

We’ve always been clear that councils require more powers and resources to deliver affordable housing at sufficient scale. It’s a view shared by the Mayor of London – and together we’ll continue making the case to ministers.

The COVID-19 emergency has made our arguments more urgent than ever. The pandemic demonstrated with terrible clarity the impact of overcrowded, poor-quality housing on health outcomes. It’s also brought enormous economic damage and a spike in job losses.

A mass housebuilding programme would deliver much-needed homes and much-needed jobs. So how do we make this happen?

Listening to the Queen’s Speech, I’m worried that the Government is overly fixated on misguided reforms to the planning system rather than focusing on the fundamental issue of making resources available for affordable housing.

Local authority planning departments aren’t the stumbling block to housebuilding. In London we grant permission for 50,000 new homes ever year, and there are millions of unbuilt permissions around the country.

Rather than undermining local accountability in the planning system, the Government should listen to councils on what is needed to support local delivery.

The restrictions on how we use the money raised from Right to Buy sales are a key obstacle. The current rules mean far too much of the money is taken by the Treasury or redirected elsewhere through the funding system and away from the local authorities who should rightfully have it. 

This approach is obviously unfair and inefficient. Luckily, there are some signs the Government understands the need for change. In March, it was announced that councils will gain greater flexibilities over how the sales receipts are used. The timeframe for spending receipts was extended from three to five years and the proportion of a development that can be paid for by receipts was increased from 30% to 40%.

These measures follow the 2018 removal of the borrowing cap on Housing Revenue Accounts. The direction of policy travel points towards councils being encouraged – at long last – to re-emerge as home builders, after decades of central government discouragement. 

But there can be no complacency. There’s so much more ministers could do.

The shift in the rules regarding Right to Buy sales receipts are welcome, but they will only enable marginally more local housebuilding.

Councils should have full autonomy to retain and spend the money raised from Right to Buy sales, and to use this money in a way that best helps to address local housing needs. If completely abandoning the restrictions is not possible for the Treasury, there are other measures that would help secure a more significant housebuilding boost. For example, letting councils deliver more homes by combining Right to Buy receipts with affordable housing grant funding or reassessing the interest payable on receipts that are eventually returned to Government.

There are other items on the policy wish list, of course, including long-term confirmation of social rent and affordable housing grant levels and empowering councils to compel developers to deliver the homes we give planning permission for.

Local government is as committed as ever to taking on this challenge. Ministers need to seize the moment and work with us.

Cllr Darren Rodwell is London Councils’ Deputy Chair and Executive Member for Housing & Planning

@CllrDRodwell

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