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Combined authorities could be allowed to bid for £1bn borrowing headroom
Combined authorities may be allowed to compete for the £1bn of extra borrowing headroom offered to councils to boost housebuilding, Inside Housing understands.
Local government sources claim Ministry of Housing, Communities and Local Government (MHCLG) officials have said the metro mayors would be able to negotiate chunks of the funding as part of their regional housing deals.
MHCLG would neither confirm nor deny this possibility.
Chancellor Philip Hammond announced that councils in areas of “high affordability pressure” would be able to bid for a £1bn pot of additional Housing Revenue Account (HRA) borrowing headroom in the Autumn Budget in November.
It followed discussions held between the MHCLG and a number of individual local authorities about the potential for bespoke deals on HRA flexibility.
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Combined authorities do not have an HRA, so it is not clear how a successful bid for the £1bn would work in practice.
It is also not clear whether this would give councils in one of the six combined authorities two opportunities to bid for the flexibility.
However, sources suggested that any money for social rent homes secured in mayoral housing deals would likely come from this budget.
A spokesperson for the West Midlands Combined Authority, headed up by Conservative mayor Andy Street, said: “We’re awaiting guidance from government but would obviously be interested in pursuing such an option.”
Further details and bidding criteria are expected to be released towards the end of March or in early April.
A spokesperson for the MHCLG said: “We are in discussions with a number of combined authorities about how we can support the supply of new homes in areas of high housing demand.”
Council housing representative bodies have been urging ministers to keep the bidding criteria as flexible as possible to avoid the programme being undersubscribed.
A similar £300m initiative introduced by previous chancellor George Osborne was quietly wound down after £220m was allocated to build 3,000 homes – well short of the government’s 10,000 target.
