A little over 50% of local authorities no longer hold housing stock, but there is a clear appetite for councils to take back control. The scale has in fact increased to a rate not seen since the early 1990's.
My social housing audience will be aware of local authorities impact on providing families with suitable accommodation. For those that are less aware I strongly recommend you download George Clarke's recent exposé on the plight of council houses on Channel 4. It is an extremely insightful and stark reminder!
Added to this, in the recent Children’s Commissioner's Bleak Houses report figures highlight that there are 124,000 children in England living in temporary accommodation (excluding some 92,000 transient living arrangements).
So why are councils reverting back to housing delivery?
In a recent report commissioned by the Royal Town Planning Institute - Local Authority Direct Delivery of Housing, there are a number of motivators for this. Condensing these down, areas include:
1. At regional levels, councils are faced with a growing housing crisis and Councillors consider it their responsibility to deliver to their community. Furthermore, the Homelessness Reduction Act of 2018 stipulates it is their responsibility to prevent homelessness
2. Councils are now having to be more focused on generating income to deliver services and create financial internal stability. Housing is a sound way of developing this long term investment, especially as the government has removed the Revenue Support Grant.
3. Unfortunately, there is growing concern around the quality of housing being developed by the private market - poor estate layouts, increased interest in buy to let, smaller rooms by way of example. Councils are therefore less likely to invest in these "market housing" for their own stock as a direct result.
4. Increased housing stock equates to improvements in regional skills, small businesses and, ultimately, standards of living.
What support is needed for councils to do more?
The overarching barrier councils would like changed has been the removal of the HRA debt cap, especially when linked to the Right to Buy provision.
Councils would also like to invest in their stock rather than regarding them as a debt.
The report also points towards the government reviewing a change to planning guidance thus allowing for local plans to identify types of housing that are required.
There is been hugely positive noise around the Mayor of London's recent incentive to pour £1 billion into the social rent subsidy. Homes England should drive this initiative elsewhere throughout the country.
Importantly, the same Mayor has driven £10 million of investment into supporting councils to develop much needed skills for the above delivery.
And how are councils increasing these stocks?
Research suggests that councils are gradually expanding their methods of initiatives. Some start life as wholly owned companies with a full accompaniment of services from development and acquisition, to those that enter into joint ventures.
In fact the report points to 78% of councils that have created companies, with 119 new companies being formed between January 2018 and March 2019.
Larger councils such as Bristol, Nottingham and Birmingham are looking to develop over 1000 homes a year using their own initiatives. I have witnessed a huge increase in interest around Modern Methods of Construction in supplying the need from the market. It would seem that the stigma associated with "prefab" is leaving offsite with councils seeing the investment in this technology as a sound way of decreasing time, resource and cost.
All things considered, this report should be viewed as a step in the right direction. With the government working on the Built Environment Sector Deal to increase productivity, employment, innovation and skills, George Clarke MAY be able to sleep a little sounder.