Saturday, 26 July 2014

Key motion on council funding for constructing new homes passed

The Liberal Democrats will support councils pooling borrowing limits to build new homes, after a key motion on the economy was passed today. 

But an amendment allowing caps to be lifted entirely was rejected, after Nick Clegg said it would mean homes could not be delivered now. 

In an unusual move, the party leader spoke to summarise the motion, and appeared not to rule out supporting the lifting borrowing caps entirely in the future. 

He told members he was ‘more than happy to sit down with our colleagues at the LGA and find our way through this’, but said ‘not a single home would be delivered’ if the amendment carried. 

‘This motion is… about what we can do now, not in 10, 15 years, what we can do now,’ he said.

‘It is my sincerely held belief that on accepting the motion, which is all about allowing councils for the first time to be free of some of the shackles imposed on them by treasury that basically swap the cap or allowance they are given to build houses… we will build more houses now. 

‘If we on the other hand delete all of that and go for a complete revolution of the way things are done, not a single extra affordable home will be built under our watch. That cannot be right.’

The amendment was comfortably defeated by delegates after the leader’s speech. 

Speaking in favour of it, Paul Holmes MP for Chesterfield said: ‘The construction of social homes has collapsed in this country. 

‘If we want social justice, it is about building more social housing.’ 

The Local Government Association said 600,000 new homes could be built in five years if they were allowed to invest in housing against normal borrowing guidance. 

Pooling borrowing limits would allow councils not using their full entitlement to donate it to those with large housing waiting lists. 

The motion also calls for an urgent examination of whether council borrowing for housing could be kept off the national balance sheet, as is the case in Europe, so it would not inflate the deficit. 

Motions passed at the Liberal Democrat conference become party policy- and key policies are likely to feature in their manifesto for the 2015 general election.

Ruth Dombey, vice chair of London Councils, said: ‘We would prefer to see the artificial cap on council borrowing lifted entirely. However, London Councils welcomes Vince Cable’s announcement today that he firmly supports enabling councils with a sustainable business model to borrow to invest in building more homes for rent.

‘Mr Cable supports a view held across the housing sector and local government, that sensible borrowing by local authorities to fund house building is part of the solution to the housing crisis.’

Readers' comments (7)

  • Jolly good - perhaps they could have a word with the government about building a few extra homes - oh dear, they are the government. Not to worry, perhaps they can plan to build some extra homes by being part of the next government - but neither of the leading parties have any real plans to build homes other than to prop up a few developer profits here and there.

    It is irritating when a government party suggests what needs to be done instead of doing it - the electorate are not made to trust the system by such duplicity.

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  • Usual Suspect

    Nothing wrong with building houses but ......Bad enough the government borrowing money on our behalf, but I find the prospect of councillor's borrowing money on our behalf scary and consider it something they are ill qualified to do , and if we pool borrowing limits it means that someone else's councillors can borrow on our behalf which is even more scary and seems at odds somehow with democratic principles.

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  • Rick Campbell

    It;s supposed to be god for the economy to build houses -- social houses to rent at that.

    However, whilst I support such moves, I would not like to see happen here what happened in Ireland ... which, if memory serves me well ... it doesn't always nowadays ... Gideon used to praise as a model for economic growth.

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  • Usual Suspect - you must recall the so-called housing debt being shared out recently by the government upon the remaining local authorities that have council housing. From memory I think this was about £25 Billion of debt handed out. Governments 75% Receipts from Right to Buy were ignored in the calculation preferring to saddle local authorities with massive debts for a quick buck. Hence councillors have already borrowed on our behalf to pay off the government. My local authority was previously debt free but got their share of about £250Million of new debt courtesy of the government hence no new council house will be built.

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  • My housing trust has been wanting to build more homes, they even wrote a letter to the council. Remember say "Yes" to housing, by the NHF?

    Our Lib Dems like petitions, and they have even helped to produce them.

    Don't believe what they say, I learnt that one.

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  • Money is kind of a base subject. Like water, food, air and housing, it affects everything yet for some reason the world of academics thinks it's a subject below their social standing.
    Robert Kiyosaki

    Ruth Dombey, vice chair of London Councils, said: ‘We would prefer to see the artificial cap on council borrowing lifted entirely. However, London Councils welcomes Vince Cable’s announcement today that he firmly supports enabling councils with a sustainable business model to borrow to invest in building more homes for rent.

    They will have to do something soon there is a baby boom on the way.

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  • Clegg is an absolute scoundrel. Lifting the cap allows councils to start planning for new build now and then in the real world (where real work takes place not the world where neighbourly ex-foreign secretaries help posh boys get a nice salary from the EU for..er, not sure - anyone help here?) in 18 months time houses are ready to live in.

    Clegg is just loking for any excuse - and failing that making up any old drivel - to avoid doing anything to help regular people find a secure, affordable home. In his own words, he would have joined the Tory party (the party of private landlords) if it wasn't for the Tory position on Europe. He is beyond parody and beneath contempt. Only Cable exceeds him in the spineless, cowardly, windbag stakes.

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