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‘Lift borrowing cap that curbs house-building’

Plea in battle for more council homes

16 March, 2018 — By Samantha Booth

Cllr Diarmaid Ward: Cap is ‘home blocker’

THE Town Hall is piling more pressure on the government to lift a borrowing cap that councillors say is preventing them from building hundreds more council homes.

Housing chief Diarmaid Ward said restrictions on the Housing Revenue Account (HRA) means the council’s new developments are having to be built with just 60 per cent social housing, the rest being sold privately to subsidise the new builds.

He said that if the government went ahead with plans to partially lift the cap, which means local authorities cannot borrow money above a certain level, as many as 85 per cent of homes could be for council tenants.

“We’ve come up with a very simple way of doing it that won’t cost the government one penny,” said Councillor Ward.

“Take away this borrowing cap, this new home blocker, and this will mean we won’t have to cross-subsidise with as many private homes.”

The waiting list for council tenants currently stands at about 18,000 – down on previous years when it reached 20,000.

Before 2020, the Town Hall aims to have built 500 council homes and 1,500 affordable homes for social rent and shared ownership.

In the autumn Budget, Chancellor Philip Hammond announced borrowing caps on the Housing Revenue Account – made up of rents and service charges from tenants – would be lifted for councils in high need.

Islington Council wrote to the government about this pledge, but no concrete proposals have yet come back.

Meanwhile, a draft review of the council’s new-build programme by the housing scrutiny committee found it was currently behind target, citing delayed utility company connections to networks, the discovery of asbestos and hold-ups associated with pressures in the planning and legal departments. However, these delays are expected to be “overcome shortly”.

The committee recommended that the council should work with other local authorities to lobby for relaxed restrictions on HRA borrowing and the use of right-to-buy receipts, which have to be used within three years.

The review recommended that the council considers how it can support and incentivise housing associations to deliver more affordable housing on development sites.

Cllr Ward said the council had a “good” relationship with housing associations but would now be “stepping up” that campaign.

“We stand ready to work with housing associations to achieve the maximum amount of social housing,” he said. “If there’s a way the housing associations can help us spend our right-to-buy receipts we will help them.”

A Ministry of Housing, Communities and Local Government spokesman said: “We are clear that London needs many more homes to meet its need – that’s why we have agreed £4.8billion funding to boost affordable housing in the capital.”


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