Time to take the chains off local government

The Government’s ‘deep dive’ thinking about how to tackle the escalating UK housing crisis will emerge in next week’s long awaited Housing White Paper.

06/02/2017

Jonathan Turner

Jonathan Turner

Partner

Headline briefings suggest the focus will be on local authorities to ease logjams in housebuilding and development, by freeing up green and brownfield land and relaxing planning restrictions.

But authorities say they’re unfairly targeted – and that their efforts to generate more social housing and enhance affordability for needy people are frustrated by the current regulatory environment.

So, local councils and housing associations (that bear the brunt of the homes crisis) are hoping the White Paper will recommend a loosening of rules that govern their housing operations – among a range of ‘significant new measures’ promised by the Communities Secretary Sajid Javid.

Key will be freeing councils from restrictions on their borrowing to build new homes. Currently, they control their housing stock through self-financing schemes, but within the constraints of a debt cap.

Authorities need the scope to establish
a long-term financial framework enabling them to invest, such as removing Housing Revenue Account (HRA) borrowing from contributing to public debt.

With the Government’s new willingness to involve itself in the housing market, we may also see movement in allowing councils to keep more of their receipts from properties sold through Right to Buy (RTB) new homes, and also combine RTB receipts with other funding to build through housing companies.

We may also see more encouragement for social housing providers, including housing associations, that are already pioneering new ways of increasing new builds through joint ventures, subsidiaries, and institutional investment – in which privately-funded schemes can deliver and manage new housing developments at affordable rents.

Local authorities also have responsibility for social care, so there is expectation of a vision for a renewed national and
local focus to create homes and neighbourhoods integrated with health and care services.

This could involve health and wellbeing boards working across local areas – bringing together planning, health and social care partners to develop housing that supports an ageing population.

Javid is also likely to encourage more linkage with the private sector – and go beyond the two schemes announced last year. His £3 billion Home Building Fund will provide loans for SME builders, custom builders and offsite construction – while an “Accelerated Construction’ approach is promised to deliver 15,000 new homes on surplus public land, using £2 billion to encourage new developers and different models of construction.

He has already accused developers of having a ‘stranglehold’ on land supply, and not proceeding with building developments even when planning permission has been granted.

But there remains the concern that there isn’t the capacity within the UK construction industry – or the quantity of skilled people – to build all the houses needed within desired timeframes, despite bigger firms expanding their residential homes divisions. SME builders will, therefore, need some financial encouragement to invest and expand.

As so very often, authorities will be acting as the ‘glue’ across a range of agencies and sectors, and are now looking to the Housing White Paper as an opportunity to have their regulatory shackles loosened, so they can start delivering the homes people want.

 

*This article was first published on 24 Housing. Click here to view the original article.

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