What needs to be done to secure the future of council housing?

These are meaningful changes and show what can be achieved when local and national government work together. But we know more is needed. Too many councils still can’t do what the country desperately needs: properly maintain and upgrade existing council homes and build many more.

The scale of the housing crisis is impossible to ignore. Across England, more than 1.3 million households are on waiting lists for a council home. A record 132,000 households are living in temporary accommodation, costing councils an estimated £2.8bn every year.

The recent positive national steps for council housing come after years of neglect. Since the 1980s, Britain lost more than two million council homes largely through Right to Buy. At the same time, councils have faced decades of financial restrictions, rising costs, and increasing responsibilities to improve the safety and quality of homes. The government’s measures are hugely welcome but more is needed.

Our recent survey of 66 stock-holding councils found that half will struggle to balance their Housing Revenue Accounts (HRAs) by 2029-30, while nearly nine out of 10 say they cannot meet new regulatory requirements without additional funding.

Councils support better homes and outcomes for tenants, but this must be matched by a sustainable and sufficient financial framework.

At the summit – organised jointly by Leeds, Sheffield and Southwark councils – there were clear ideas about the next steps needed.

First, councils should have parity of treatment with housing associations and be able to access a similar scheme to the £2.5bn ultra-low interest (0.1%) loans fund. Despite current access to the Public Works Loan Board, councils still face borrowing rates of around 4.4%. In a high interest rate environment, many councils are largely servicing interest rather than paying off scheme-related debt, further undermining viability.

Access to the ultra low-interest loans fund would significantly accelerate the delivery of shovel-ready council housebuilding. This funding would enable work to begin on thousands of council homes that are currently stuck on the drawing board or at the planning stage.

Second, the government should apply the new burdens doctrine to council homes. It’s quite right that new standards and regulations are introduced – such as Awaab’s Law, the updated Decent Homes Standard and building safety requirements – to increase and improve standards that our tenants rightly deserve, and ensure residents of council homes live in safe, decent and healthy homes.

It’s equally important that the government ensures there is funding to pay for these measures when they are introduced, in line with the doctrine used in other parts of the public sector.

“Councils should have parity of treatment with housing associations and be able to access a similar scheme to the £2.5bn ultra low-interest loans fund”

Third, we need reform of the broken finance system – the council housing self-financing model. The debt settlement agreed in 2012 was based on flawed assumptions that quickly proved unsustainable. A rebasing of Housing Revenue Account (HRA) debt to reflect current realities is essential to unlock investment and delivery. We must also reform the fiscal rules governing council housing investment.

Classifying the HRA within public sector net debt discourages long-term investment and puts the UK out of step with international practice. In most comparable countries, public housing is excluded from the main measure of government debt. Adopting a similar approach here would unlock significant additional capacity for councils to build.

Council homes are so much more than a safety net. They are essential national infrastructure: secure, affordable housing that supports thriving communities and strong local economies. The pay-off for funding sufficient decent council housing is massive.

The summit in Leeds again showed that councils across the country are united in standing up for council homes and making the case for council housing. We will keep working together and with government to turn that ambition into reality, to write a new chapter for council housing as one of our country’s great success stories.

Sarah King, leader, Southwark Council