‘What took you so long?’ is the obvious question that springs to mind upon hearing the government has finally signalled it will allow councils to build much-needed new homes through direct grant allocation (Inside Housing, 1 August).
The Association of Retained Council Housing views this as a major breakthrough in its campaign for a fairer financial regime for local authorities.
It is just a shame that it has taken the squeeze on credit and slowdown in construction to make ministers wake up to such a glaringly obvious contribution to solving the national housing crisis and meeting targets for 3 million new homes by 2020.
It seems remarkable that local authorities – which are democratically accountable, have ‘triple A’ credit ratings and are able to link house building with homelessness, regeneration, the environment and a whole host of other strategic responsibilities – have not been trusted to access direct funding. Perhaps the recent demise of Ujima Housing Association and the difficulties encountered by a number of high profile arm’s-length management organisations have helped make the case that efficient councils, such as Wandsworth, should be embraced alongside other models as equals, rather than viewed with suspicion.
As always, the devil is in the details. Investment options must be considered within the context of the dire need for reform of the housing revenue account subsidy system, which is under review. Direct building by councils will only work if the financial regime does not penalise them through subsidy reduction, as is currently the case.
Let’s hope councils really do get a level playing field – rather than too little too late.
Brian Reilly is deputy director of housing at Wandsworth Council, which holds the vice-chairship of ARCH