Cllr Nick Forbes, Senior Vice-Chair of the Local Government
Association, has today urged the Government to allow all councils
to borrow to build, in an appearance before the House of Commons’
Treasury Select Committee.
Last week’s Budget saw the Government pledge to allow some
councils with “high affordability pressure” to be able to bid to
borrow up to an additional £1 billion on housing revenue
accounts, but the LGA has consistently called for the cap to be
lifted in its entirety, with no conditions attached.
Cllr Forbes argued for the Government to lift the cap across the
board, saying that previous attempts to link stringent conditions
to such a measure had failed to deliver any homes. The upcoming
Local Government Finance Settlement would be an ideal opportunity
to lift the cap.
Both the National Housing Federation and the Federation of Master
Builders backed the Local Government Association in their call to
allow councils to borrow to build new homes, without further
restrictions, whilst appearing alongside Cllr Forbes at the
committee.
In addition, Cllr Forbes argued for councils to be able to keep
100 per cent of their Right to Buy receipts, and for planning
departments’ cost of applications to be covered by funding from
central government.
In his remarks at the House of Commons Treasury Select Committee,
Cllr Nick Forbes said:
“It’s better to just lift the housing borrowing cap for all local
authorities, so that we can all get on and take the decisions
that are in the interests of our respective communities.
“We have a situation where most of the borrowing caps for local
authorities are operating under twenty per cent of their cap, so
the flexibility to manoeuvre is very limited.
“The Government’s indication in the Budget of £1 billion for
housing revenue accounts goes some way towards helping tackle our
housing shortage, but I don’t think it is necessarily going to
meet the scale of the challenges we face.
“There wasn’t an announcement in the Budget, as far as I saw,
about Right to Buy receipts, and that’s another one of the issues
that I know exercises local authorities. Currently, we only
retain fifty per cent of the Right to Buy receipts and the rest
goes to the Treasury. We therefore have to bid competitively to
get that money back into our areas, against other councils, and
that makes it very difficult to guarantee a long-term,
like-for-like replacement programme.
“Our argument would be that we should be allowed to use 100 per
cent of the receipts from Right to Buy sales to invest in new
homes.
“Where I’ve seen delays in the planning system, it’s been
arguments between developers over particular pieces of land and
access rights and so on, and that has held up delivery, but I
don’t see the planning system as the barrier here, in terms of
delivering the new homes that we want.
Speaking following the Committee appearance, Cllr Forbes further
stressed, ahead of the upcoming Letwin review into the topic,
that councils need to be given the powers to make sure that
developers complete homes on sites which have received planning
permission.
“Council planning departments currently approve nine in ten
applications, and our estimates place the number of plots with
planning permission that have yet to be turned into built-out
homes at approximately 400,000.”
