English Council Coalition calls for £644m emergency housing fund to save ‘broken’ system
An “unprecedented coalition” of councils in England has called for an emergency injection of £644m from the government to stabilise their housing accounts and prevent investment in new homes being delayed or cancelled.
After promises from the new Labour government of a “council housing revolution”, 100 local authorities have now warned that the financial model for council housing finances is “broken”, with a £2.2bn “black hole” in councils’ dedicated budgets expected by 2028.
The coalition, led by Southwark Council, warns that unless more 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, local authorities believe that some of them will have no option but to sell more of their existing stock to finance investment in an ever-shrinking portfolio of council homes.
As a result, the group of councils commissioned a report, setting out a full roadmap to recover stability in the UK’s council housing over the next decade and critical policy changes for the realisation of the new government’s social housing ambitions.
Among this roadmap are the five solutions identified by the report. In the eyes of the councils, these points of action will 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 report identifies the following recommendations to the new government:
1. A new fair and sustainable HRA model – including an urgent £644 million one-off rescue injection, and long-term, certain rent and debt agreements
2. Reforms to unsustainable Right to Buy policies
3. Removing red tape on existing funding
4. A new, long-term Green & Decent Homes Programme
5. Urgent action to restart stalled building projects, avoiding the loss of construction sector capacity and a market downturn
Councillor Kieron Williams, Leader of Southwark Council, said: “This unprecedented coalition of councils – representing every corner of England - is united in our determination to ensure our residents have decent and affordable homes. For families across our country their council home is a foundation - giving them the security needed to put down roots and flourish. However, the reality is that our national council housing finances are on the brink.
“Our new government has committed to delivering the biggest increase to affordable and social housing in a generation. The Deputy Prime Minister’s recent announcements demonstrate that they know the critical role councils will play in reaching this ambition.
“Our five solutions offer the new government an opportunity to turn this around - lifting the council homes we have up to modern, safe, healthy and green standards, and delivering the thousands more council homes that our country urgently needs. By investing in them together, we can transform lives for the better for generations to come."
A spokesperson for the Ministry of Housing, Communities and Local Government said: “We are facing the most acute housing crisis in living memory and that is why we are working at pace to reverse the continued decline in the number of social rent homes.
“The government has already given councils more flexibility to use right-to-buy receipts to deliver more social housing. This is on top of an additional £450m for councils to secure homes for families at risk of homelessness.
“We have made clear we will give councils and housing associations the stability they need and will set out further details at the next spending review.”
The full report, Securing the Future of Council Housing, is available here.
Harry Rodd
