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Councils ‘challenging’ ministers after exclusion from £1bn HRA headroom deal
Councils which worked with government to develop new funding flexibility for new homes have hit out at ministers after being excluded from bidding.
Councils hit out at government after being excluded from £1bn HRA headroom deal #ukhousingThree councils that worked with government officials for more than a year to develop plans to allow councils to increase their borrowing capacity have told Inside Housing they were “disappointed” to discover they would not be allowed to bid for the fund.
The government revealed last week that only councils where private rents are £50 more than social rents would be allowed to bid.
This saw Sheffield, Stoke-on-Trent, and Newark and Sherwood councils excluded – they have been in talks with the Ministry of Housing, Communities and Local Government (MHCLG) since early last year about additional borrowing headroom to deliver more affordable homes.
Janet Sharpe, director of housing and neighbourhoods at Sheffield Council, said: “To be quite honest it’s been very difficult, we are challenging the decisions on that. We’ve got a significant affordability gap and significant inequalities.”
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She added: “We’re raising our concerns. We wanted the flexibility of additional headroom because we’ve got ambitious plans to build more homes. We just need to see what they’ve based their decision on.”
Carl Brazier, director of housing and customer services at Stoke-on-Trent Council, said: “We’re disappointed not to have an opportunity to bid. However, we have a good relationship with MHCLG and officials seem open to discussing the future work we have planned, and we will be discussing matters with them shortly. We’ve also asked for the data they used to inform their decision on additional borrowing in order that we can fully understand matters. They have sent us this information and we are now analysing this.”
Eamon McGoldrick, managing director of the National Federation of ALMOs, said: “We’ve got some members who say they’ve got high demand for social housing and we’re disappointed government didn’t recognise the efforts that these three councils put in.”
He added the three councils are considering submitting bids anyway in the hope that they could benefit from any underspend on the £1bn headroom.
He added that the “overall message” on being more flexible with borrowing caps is “welcome” and that some government officials “have a certain amount of sympathy” for lifting the debt cap.
It is understood council representatives will challenge government over the robustness used to calculate private rent levels.
Councils had already expressed disappointment at the focus on Conservative-led areas in the South of England as a result of the bidding criteria.
The criteria does not consider factors including levels of homelessness and housing waiting lists.
Sheffield has a waiting list of 28,852 households, Stoke has 2,477, while Newark and Sherwood has 2,133.
Rebecca Rance, chief executive, of Newark and Sherwood Homes, said: “We understand that areas of high affordability pressure require support, however, we feel it is a shame that the prospectus doesn’t recognise the wider pressures and needs in communities.
“The white paper suggested that those ambitious local authorities, with recognised and evidenced need, would have the potential to develop a bespoke local deal.”
Update: at 14.46pm a comment from Rebecca Rance was added to the story.
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