There’s a quiet revolution going on.
Thanks to this year’s changes in legislation, which saw the cap removed on how much councils can borrow to build new homes, dozens of building sites are springing up around the country.
Councils are building homes again, and at scale!
The borrowing cap imposed significant restrictions on councils’ ability to respond to local housing shortages. They had to rely on developers and housing associations to meet the need; but that’s not the same as being in control of your own destiny.
Now local authorities are making up for lost time. A recent NLA report showed in London alone, 26 boroughs have set up development companies. This followed a pledge in October last year by sixty local authority leaders to build thousands more homes following Theresa May’s announcement to remove the current cap.
Council housing building set to reach 1970s levels
We’re at the start of what will be the biggest programme of council house building in over forty years. Councils built over 100,000 homes a year back then, yet delivered fewer than 3,000 in 2016-17. There’s a desire to hit these heights from the 1970s again.
This is important for a number of reasons. It gives councils direct control in meeting the housing needs of their communities and reducing homelessness, while new homes also generate revenues for front line services. Also, mixed-tenure development sales receipts can be used to cross subsidise more council housing, as councils make use of brownfield sites ripe for new homes. It should also be added that in Homes England, authorities have an astute facilitator of new opportunities.
I’m seeing this new era of local authority house building through our work with authorities like Doncaster, Liverpool, Wigan, Bristol, Leeds and Westminster to create a substantial number of homes available for affordable social rent. That’s possible as councils take a long-term view for their local tenure needs.
Yet this brings a new challenge; having the skills to meet the demand. After years of sporadic house building, in-house development teams have waned. There are lots of good people delivering homes, but more are needed by councils.
Finding the right resource
One solution is hiring from the private sector, and this has been on the rise as authorities recruit from developers and housing associations. But even this talent pool is not infinite and there is also the issue of salary expectations, with hard pressed budgets not always able to afford the packages required.
Solving this needs bold thinking. I think one sustainable long-term option is to develop mechanisms that encourage the transfer of skills from private sector companies to public bodies. For example if a council chooses a long-term development partner, it should be stipulated that a legacy of this relationship will be equipping the council with an experienced in-house team by the end of the partnership, so they are able to self-deliver in the future.
This is about being imaginative in solving a capacity issue that will only get bigger.
Richard was writing in the July edition of Local Government Chronicle