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Housing minister open to considering changes to borrowing cap policy
The housing minister has said he is open to considering changes to the government’s policy of lifting the borrowing cap only for certain councils.
When asked by Liz Twist, a Labour MP on the Housing, Communities and Local Government Select Committee, at a session this afternoon whether the government has considered raising the cap for all councils, Dominic Raab said he does not have a “closed view” on the policy.
In the Autumn Budget last November the government announced £1bn of extra borrowing capacity for those councils where housing demand is highest. But critics have said £1bn is not enough to build the number of council homes required.
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Mr Raab said: “We have focused in those areas where there is highest demand and its expensive because that’s the targeted approach that we’re taking, but we will keep it under review and I’m very happy if you or anyone else on the committee wants to make a reasoned case why there should be modifications to the approach we’re taking to look at that. But what we’re going to try and do is make sure we take a balanced approach, responsible with the public finances and targeting the extra spending power of local authorities where it’s needed most.”
He added: “I think we need to look case by case at this. If you want to make a reasoned submission to us, or if the select committee thinks we ought to be tweaking this policy, it’s something I don’t have a closed view on… Ultimately my main overriding goal is to get the homes built.”
Ahead of the spring statement tomorrow councils are calling on the government to lift the Housing Revenue Account borrowing cap. Labour-led Islington Council said currently 60% of the homes it builds are for council rent, with the rest for market sale. Lifting the cap would allow the council to make 85% of the homes it builds for council rent.
