Hungry to build

Political rhetoric and professional opinions are all well and good, but a poll during the Association of Retained Council Housing’s annual tenants’ and residents’ conference last month provided a real chance to gauge the views of more than 100 people who live in council homes.

Eighty-seven per cent thought housing had become more important due to the recession and 96 per cent thought councils should have more resources to build new council housing. What is worrying is that only 15 per cent of tenants were optimistic that the ongoing review of housing finance would provide a fairer and more transparent system. While I have complete respect for the views of tenants, on this particular occasion I hope they are wrong.

Dealing with the downturn, prompting council building and drastic reform of housing finance are inextricably linked.

Unemployment and repossessions are mounting daily and, with the right funding and framework in place, investing in building council homes is an obvious way to meet housing needs and stimulate the economy. The £100 million in the Budget for new council housing is welcome, but this is likely to pay for just a few thousand new homes. This is simply not enough. Councils’ ability to make a significant contribution to the severe shortage of affordable housing depends on wider reform of housing finance.

Gordon Brown promised to remove the barriers to council building. ARCH organised a panel discussion back in March at the House of Commons, in partnership with the Association for Public Service Excellence, to set out what those barriers are.

There is enormous appetite among councils to get building. Obstacles identified include not being able to borrow against future rental income and remaining restricted by proposed changes to revenue and capital rules. It was glaringly apparent that the ability to build and the huge question mark that hangs over council housing in the shape of the housing revenue account review cannot be separated.

ARCH’s submission to the HRA review - expected to report in June - calls for an end to a system that means, in many cases, 20p in every £1 of rent disappears into a national pot. If councils are to build new homes in any significant number, they must be allowed to retain their full rental income and right to buy receipts from existing stock and have equal access to social housing grant.

We can only hope that the piecemeal £100 million Budget cash provides a chance for councils to show what they can achieve. More resources must follow, along with a fairer finance system that allows council housing to be a mainstream option, fulfilling its undoubted social and economic potential.

John Bibby is director of housing and community services at Lincoln Council and secretary of ARCH

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