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Councils hopeful of Budget announcement on housing deals
Councils that have been in talks with government officials over potential bespoke housing deals are hopeful of an announcement in the Autumn Budget next week.
Sheffield City Council, Stoke-on-Trent City Council and Newark and Sherwood Homes – the ALMO of Newark and Sherwood Council – have been in discussion with Department for Communities and Local Government (DCLG) civil servants since March.
They are asking for extra Housing Revenue Account borrowing capacity and flexibilities over the use of Right to Buy receipts.
February’s Housing White Paper and the Conservative manifesto both mentioned deals to help ambitious councils build, with several other councils also approaching the government.
A source close to the discussions told Inside Housing that DCLG officials recently indicated that an announcement would be made “at the next fiscal event”.
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Janet Sharpe, director of housing and neighbourhoods service at Sheffield City Council, said: “I am certainly optimistic. We’ve been working closely with the government about the Sheffield bespoke deal and we’re hopeful of hearing something positive on this.
“We’ve answered all of the questions that have been asked of Sheffield and we’re ready to go whenever the government is.”
Eamon McGoldrick, managing director of the National Federation of ALMOs – which has been assisting with the talks – said: “We’re aware that the DCLG will need to persuade the Treasury, therefore we’re hopeful of an announcement in the forthcoming Budget.
“The positivity around the rent settlement and the Local Housing Allowance cap being dropped also gives the impression that government will ease pressure on local authorities and providers to build more homes. Things have certainly been a lot more positive in the past six weeks.”
Carl Brazier, director of housing at Stoke-on-Trent City Council, said: “Discussions with the DCLG are continuing and we are feeling very positive.
“I hope that the council will take part in further discussions with the government about our bespoke deal.”
Ken Lee, chair of the housing panel at the Chartered Institute of Public Finance and Accounting, said: “The case studies presented demonstrate what could be achieved.
“If the chancellor were to endorse this approach, it would allow more councils to contribute to solving the housing shortage.”
Rebecca Rance, chief executive of Newark and Sherwood Homes, said: “If they think they have enough information to go ahead with a deal for Newark and Sherwood that would be fantastic.”
Last month, communities secretary Sajid Javid told the BBC’s Andrew Marr: “We are looking at new investments and there will be announcements, I’m sure, in the Budget covering housing.”
But Mr Hammond poured cold water on his colleague’s suggestion that the government should consider borrowing to invest in housing and infrastructure, saying: “It is not responsible to make so-called hard choices by loading the price onto the next generation and the generation after that.”
Efforts to stimulate council building by offering additional borrowing in 2014 fell flat, with councils blaming overly restrictive rules.
Councils have not built more than 5,000 homes in a year since 1992, according to governemnt statistics, and though last year they hit a recent peak of 3,300 it is incomparable to the 250,000 a year achieved in the 1950s and peaks of more than 150,000 a year in the 1970s.
