“Theresa May’s flagship policy to solve housing crisis will deliver no new homes in half of England”

“Theresa May’s flagship policy for sparking a revival in council housebuilding will not deliver a single new home in more than half of the local authorities in England, The Independent can reveal.

Some of the most deprived towns and cities with the greatest need for new homes, including Liverpool, Bolton and Wakefield, are among areas that will miss out as a result of changes that will only benefit some councils.

The prime minister used her speech to the Conservatives’ annual conference last month to announce a major change that will see the government scrap restrictions on how much councils can borrow to fund housing.

She said: “Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it.”

No 10 said the move would allow councils to build up to 10,000 new homes a year for low-income families, as councils scale up borrowing by £4.6bn.

However, ministers have admitted that less than half of councils have the type of account that will allow them to increase their borrowing.

Only 160 of the 326 councils in England with responsibility for housing have housing revenue accounts (HRAs), the Ministry of Housing, Communities and Local Government said.

The revelation will prompt fears that people in areas with a desperate need for new homes will lose out, while those in neighbouring areas could benefit from a boom in housebuilding.

Councils set to miss out on the potential funding boost include several with some of the longest housing waiting lists in the country.

Authorities that will be unable to borrow more include Bolton, where 25,600 households are on the council waiting list – the third highest in England – and Wakefield, the sixth highest with 20,600 families waiting for a home.

Liverpool, which has the 11th longest waiting list, totalling 16,500 households, will also miss out.

The Independent has revealed that the government spending watchdog believes the lifting of the HRA cap will deliver far fewer new homes than Downing Street claimed.

The Office for Budget Responsibility (OBR) said the move would result in fewer than 9,000 new homes over the next five and a half years – a fraction of the 10,000 per year predicted by ministers.

While it will allow councils to build 20,000 new homes – around 3,600 a year – the OBR said this would be offset by fewer homes being built by housing associations, meaning the net total is just 9,000.

Many councils have already transferred their housing stock to a housing association and closed their housing accounts, meaning they will miss out on the ability to use their increased borrowing powers to fund thousands of new homes.

In response to a parliamentary question from Labour, housing secretary James Brokenshire said: “There are 160 local housing authorities without a housing revenue account, as they have transferred their housing stock to a housing association.”

Governments have long encouraged councils to close their housing accounts and transfer their homes to a private body because, unlike council borrowing, housing association debt has traditionally not been included in national debt figures.

Under current rules, councils must own 200 homes before they are allowed to open a housing revenue account, creating an obstacle for many that might now wish to do so. Authorities are also likely to have lost their housing expertise when they transferred their properties to a housing association. …”


One thought on ““Theresa May’s flagship policy to solve housing crisis will deliver no new homes in half of England”

  1. They have simply exposed the Conservative Party’s normal mode of operation vis.

    1. As usual, all puff and no substance; and

    2. Playing favourites to ensure that the money goes to the constituencies where bribing the voters matters and not to the areas which have the most need.


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