Back in March, Directors from this cross party group of local authorities gathered at a Summit to address an increasingly urgent financial crisis. Ahead of their full report release later this year, authored by Toby Lloyd and Rose Grayston, this interim release summarises their recommendations.
The report warns that England’s council housing system is broken and its future is in danger. An unsustainable financial model and erratic national policy changes have squeezed their budgets and sent costs soaring. New analysis from Savills shows that councils’ housing budgets will face a £2.2bn ‘black hole’ by 2028.
Unless something is done soon, most council landlords will struggle to maintain their existing homes adequately or meet the huge new demands to improve them, let alone build new homes for social rent. Across the country development projects are being cancelled and delayed, with huge implications for the local construction sector, jobs and housing market.
Rather than increasing supply, the reality is that some councils will have no option but to sell more of their existing stock to finance investment in an ever-shrinking portfolio of council homes.
Their recommendations include urgent action to restore lost income and unlock local authority capacity to work with the new government to deliver its promises for new, affordable homes throughout the country.
The five solutions set out detailed and practical recommendations to the new government:
- A new fair and sustainable HRA model – including an urgent £644 million one-off rescue injection, and long-term, certain rent and debt agreements.
- Reforms to unsustainable Right to Buy policies
- Removing red tape on existing funding
- A new, long-term Green & Decent Homes Programme
- Urgent action to restart stalled building projects, avoiding the loss of construction sector capacity and a market downturn
They make up a plan for a ‘decade of renewal’, with local authorities and central government working together to get ‘Housing Revenue Accounts’ (HRAs) back on stable foundations, bring all homes up to modern and green standards, and deliver the next generation of council homes.
Councillor Kieron Williams, Leader of Southwark Council, said: “Our country’s largest council landlords have come together because we see every day how council homes transform lives for the better. For families across our country their council home is a foundation - giving them the security needed to put down roots, flourish in childhood, get on at work, stay healthy and age well.
“However, erratic policy choices from our last government have left council housing finances completely broken and the system’s future is in danger. Councils are being forced to cancel new build developments, and even sell off council homes, to focus on keeping their existing residents safe.
“We are releasing this interim report now, from England’s largest council landlords, because we want to work with the new government from day one to deliver the more and better council homes that our communities need. With a growing number of council landlords on the brink, urgent action is needed to but our national council housing finances back on firm foundations. Our 5 solutions set out how we can work together to achieve this, and to secure council housing for generations to come.”
The 20 local authority landlords jointly publishing this report are:
- Birmingham City Council
- Bristol City Council
- Camden Council
- Dudley Metropolitan Borough Council
- Royal Borough of Greenwich
- Hull City Council
- Islington Council
- Hackney Council
- Kirklees Metropolitan Borough Council
- Lambeth Council
- Lewisham Council
- City of Wolverhampton Council
- Nottingham City Council
- Leicester City Council
- Newcastle City Council
- Rotherham Metropolitan Borough Council
- Leeds City Council
- Sandwell Council
- Sheffield City Council
- Southwark Council