Ministers had the much-delayed housing white paper in the Government grid for publication this week, until Theresa May told them it wasn’t meaty enough.
So here’s a fact for Theresa May and her Ministers to chew on as they to revive their flagging housing record. The last time we consistently built the 200,000 homes a year needed for the PM to make good her promise to build a million homes over this five-year Parliament, around half of those new-builds were council homes.
In fact, going all the way back to the second world war, there’s only been one year when more than 200,000 new homes were built without at least a third of them being done by councils. That was 1988, at that heart of the unsustainable Lawson boom, which was swiftly followed by a housing crash with thousands of families having their homes repossessed.
Answer is simple
So if Theresa May wants to meet her pledges to the country, and to ‘just about managing families’ in particular, a big part of the answer is simple – let councils build more homes, as Labour has said. And the simple way to do so is to remove the unwarranted restriction on councils’ capacity to do what private developers do in their position, and borrow to build. It’s what all councils do successfully and sensibly for capital investments other than housing. And it’s what the Chancellor conceded makes sense for the country in general in the recent Autumn Statement, when he said that funding infrastructure “from additional borrowing …is the responsible way to secure our economy for the long term”.
“It’s a fair point that over 13 years in government Labour tended to fund housing associations rather than councils to build new affordable homes. But by the end we were achieving very good levels of building for social rent.”
If the PM took this step she’d have Labour’s backing but also support from the Conservative-led Local Government Association, Conservative councils across the country and the House of Lords Economic Select Committee whose members include former Conservative Chancellor, Norman Lamont.
It’s a fair point that over 13 years in government Labour tended to fund housing associations rather than councils to build new affordable homes. But by the end we were achieving very good levels of building for social rent – starting some 40,000 new genuinely affordable social rented homes a year by 2009/10, now down to a shameful level of less than a 1,000 a year.
We also started to put in the foundations for a big boost in council housebuilding. When I was Housing Minister in the last year of the last Labour government I set up the Local Authority New Build programme to build thousands of council homes – with some councils building for the first time in a generation. I also settled plans for the full devolution of council housing finance, which to Coalition ministers’ credit they carried though and which has led directly to the small but significant pick-up in new council house building over the last few years.
We didn’t do enough
However we didn’t do enough, which is why Labour in government next time will go much further. We’d give councils a chance to get their fair share of any central government investment, as we did before in 2009. And we’d lift the centrally-imposed cap on councils borrowing to build new homes. What better investment – especially with rock-bottom borrowing rates – than assets with an immediate capital value and revenue stream to pay back the borrowing then produce a longer-term surplus for the public purse? Above all, what better public investment than new homes to rent and buy at a cost that local people can afford?
Independent analysis suggests this would mean 60,000 new council homes in the first five years, an essential element in a proper long-term plan to fix the country’s housing crisis.
This would be money well spent. Not only would it mean more affordable homes to rent and buy, it would also save the taxpayer money. My report last year showed how more council and housing association housing means lower rents and so lower housing benefit bills too.
After almost seven years of housing failure under Tory Ministers where the number of new affordable homes built last year fell to the lowest level in 24 years, it’s time for Theresa May set aside the long-time Tory rejection of council housing and back Labour and Conservative councils to build more homes.
John Healey is the MP for Wentworth and Dearne and Shadow Secretary of State for Housing