You are viewing 1 of your 1 free articles
Can local authority trading companies get us building like it’s 1977?
Local authority trading companies give councils a mechanism for more direct involvement in development while retaining a degree of commercial freedom, writes Jemma Shorrock, associate director at Boyer
Jemma Shorrock is associate director at Boyer
Local authority trading companies give councils a mechanism for more direct involvement in development while retaining a degree of commercial freedom, writes Jemma Shorrock, associate director at Boyer #UKhousingClearly to meet the government’s target of 1.5 million homes and to “significantly increase the proportion of affordable and social homes within this total”, a new impetus is required. The manifesto promise equates to in excess of 300,000 homes per annum. Yet according to the HBF, just 39,170 new homes were given planning approval in England during Q1 2025 – the lowest number of quarterly approvals since 2012 and the third lowest since the dataset started in 2006. Furthermore, at 4,616, the number of units was 42% lower than during the preceding quarter and 36% down on a year earlier.
Britain hasn’t delivered in excess of 300,000 homes per annum for almost half a century. In 1977, that target was reached, but successive governments have failed to reach it since. Much has changed in that time, but the most consequential shift is that back then, local authorities were responsible for nearly half of all new homes, whereas today those figures are negligible.
Read more
The £39bn now earmarked for affordable housing, while a significant step in the right direction, is only part of the solution. Without a stronger partnership between public and private sectors, and local authorities having the capacity to take a more active role in development, the number of homes delivered will remain stubbornly below target.
Technically, local authority trading companies (LATCs) provide a means to do just that: to give councils a mechanism for more direct involvement in development while retaining a degree of commercial freedom.
“Councils can act as developers and landlords, often unlocking difficult sites and cross-subsidising affordable housing. But limitations are also becoming increasingly apparent”
Under the Teckal exemption, which permits councils to set up trading companies exempt from public procurement rules, LATCs have become more commonplace, going some way towards replacing old-fashioned council housing. By 2018, there were 743 LATCs across England, Scotland and Wales, of which nearly a quarter focused on property and investment.
The logic is appealing. LATCs provide councils with greater strategic control than third-party arrangements, enable more agile decision-making than traditional council structures, and create opportunities to reinvest profits in local services. They can also allow councils to step back into housing delivery without the political and financial exposure that accompanies direct development.
The structure has had its successes, demonstrating that councils can act as developers and landlords, often unlocking difficult sites and cross-subsidising affordable housing. But limitations are also becoming increasingly apparent.
While LATCs are a promising tool, they are not a silver bullet. Many have struggled with governance, transparency and viability. Others have fallen short of their housing delivery objectives due to resourcing and market conditions.
A 2024 report by UNISON, Trading Places, highlights the pressures that LATCs place on council staff, particularly in creating a two-tier workforce with differing pay and pension rights. This not only raises questions around equal pay but also undermines morale and recruitment in a sector already under strain.
Equally significant are the wider systemic constraints. LATCs still face the same planning bottlenecks as any other developer. Without access to sufficient planning officers and technical consultees, projects stall. And the viability challenges facing the sector – high costs, slow sales rates and uncertainty around demand – affect local authority ventures just as much as plc housebuilders.
“LATCs place pressure on council staff, creating a two-tier workforce with differing pay and pension rights. This not only raises questions around equal pay but also undermines morale and recruitment”
So while the Spending Review provided a welcome boost for affordable housing, it overlooks a critical component: the machinery of delivery. To build like the 1970s, we need a model that reflects today’s economic and social realities, but which restores a balance between public purpose and private delivery.
That means empowering councils to play a more active role in development – whether through LATCs, joint ventures or partnerships with housing associations and developers. And it also means recognising that councils cannot deliver alone.
A co-ordinated approach between public and private sectors is essential. From identifying land, to co-designing masterplans and navigating planning and funding infrastructure, early-stage collaboration must become the norm.
The ambition to return to 1970s-level output is commendable. But achieving it means more than restoring the public sector’s role in housing. It means rethinking how the public and private sectors work together.
If we want to build like it’s 1977, we must move beyond structures and towards substance, investing in the planners, officers and partners who can make delivery happen.
Jemma Shorrock, associate director, Boyer
Sign up for our development and finance newsletter
Already have an account? Click here to manage your newsletters
Related stories
