It’s hard not to pinch yourself when you see Conservative-dominated local authorities demanding the right to build thousands of new council houses from a Labour government.
The campaign launched at Harrogate today by the Local Government Association says that its members could build up to 300,000 additional affordable homes if the government reforms the housing revenue account (HRA), get to keep the extra income from retaining their tenants’ rents, are released from their historic debt and allowed to borrow against their assets.
After all the private borrowing of the last decade, by the banks and through the private finance initiative, turned out to need a public bail-out when things went wrong, why not set councils free?
But you also have to wonder why, if it’s that simple, the government has not done it already. True, it’s taken years of campaigning to convince the Treasury to allow local authorities any freedom at all but can it really just be a conspiracy led by evil financial mandarins?
Experts are most sceptical about central government taking over that historic debt, pointing out that the servicing costs would still have to be paid at a time when public spending budgets are under their greatest pressure in 30 years. Has the moment already passed?
If local authorities get to retain their rents, who is to say that the ones with the surpluses will use it to build more homes? What happens to the big inner city authorities who have deficits rather than surpluses? And even if the public borrowing rules are changed what’s to stop the Treasury using it as an excuse to cut the Homes and Communities Agency budget accordingly?
Which is why the review of the HRA, when it is finally published, is likely to be considerably less radical than the LGA says it wants. ‘Freedom’ for local authorities is a worthy cause - but only if it delivers desperately needed new homes. Which then makes you wonder how many Conservative councils also want ‘freedom’ from exactly that.
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