Provision of Council Housing
(3 weeks, 3 days ago)
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Chris Hinchliff (North East Hertfordshire) (Ind)
Council housing is the first, most important and only viable solution to the housing crisis and to creating a society that matches the hopes of both the Labour movement and the wider public. Not long ago, under the leadership of the current Prime Minister, Labour Front Benchers now sitting in Cabinet declared that housing is a fundamental human right, that Labour would restore social housing as the second-largest tenure ahead of the private rented sector and that the mantra of Ministers as they did so would be “council housing, council housing, council housing”.
As voters continue to demand the change that the Labour Government were elected to deliver, now is the time to recapture the clarity and optimism of that vision. It bears repeating at the outset that solely expanding the market supply of housing is not a solution to providing the genuinely affordable homes that so many families across our country desperately need.
Warinder Juss (Wolverhampton West) (Lab)
According to the charity Crisis, only 1.4% of one to three-bedroom properties in my constituency are affordable to renters who need housing benefits, while the number of people on the social housing waiting list in Wolverhampton has nearly tripled in three years and rents have surged by over 35% in the last five years. Does my hon. Friend agree that the housing emergency demands urgent and sustained action, and does he therefore welcome, as I do, this Government’s commitment to delivering the biggest increase in social and affordable house building in a generation?
Chris Hinchliff
I fully agree with my hon. Friend. The points he raises perfectly exemplify why the provision of council housing is so important.
England has seen 724,000 more net additional dwellings than new households since 2015, yet in the same period the number of households in England on local authority housing waiting lists rose by more than 74,000.
Dr Ellie Chowns (North Herefordshire) (Green)
Given that 1.3 million households are on council housing waiting lists, and given the previous Labour commitments to tackling the social housing crisis that he presented, does the hon. Member agree that it is extraordinary that the Minister has repeatedly refused to set a target for social housing? The Government think that setting a target for building any type of housing will address the housing crisis, but they are failing to address the specific problem of building social housing.
Chris Hinchliff
I fully agree that council housing is essential to meeting the housing crisis that we face, and I hope that we will hear ambitious remarks from the Minister.
The question is not simply how much housing is built, but the type of housing built and for whom. As has been referenced, more than 1.3 million households in England are trapped on waiting lists—a rise of 10% in the past two years alone. The scale of our failure to provide homes for all our citizens is staggering and reveals in the starkest possible terms the absolute folly of relying on the private sector to meet the public’s basic needs.
Jim Shannon (Strangford) (DUP)
I commend the hon. Member for securing the debate. In my office, as I suspect in everybody else’s, benefits are the first issue of importance and housing is the second. One possible solution—I want to be constructive, and I showed him this suggestion—is to focus on building smaller social housing units, enabling older couples to move out of family homes, which are larger and more difficult to heat. That would enable younger families to stay within their community and older people to have homes that are easier to heat. When it comes to solutions, it is also about that.
Chris Hinchliff
I thank the hon. Member for that intervention. As usual, he makes a good point, and I wholly agree.
As our whole nation loses out on the stifled energy, talent and creativity of so many people held back by not having a secure home where they can put down roots and flourish, it is ever clearer that the magic of the invisible hand of the free market is little more than a fairy tale told by economists to justify a refusal to meet our obligations to the least well-off members of society. However, if we look to our past for inspiration, we see many parallels between the challenges confronting us now and those facing the great post-war Labour Government who took office 80 years ago. Then, Labour came into office determined to change the “devil take the hindmost” approach to housing policy in which, as Aneurin Bevan described:
“The higher income groups had their houses; the lower income groups had not. Speculative builders, supported enthusiastically, and even voraciously, by money-lending organisations, solved the problem of the higher income groups in the matter of housing”—[Official Report, 17 October 1945; Vol. 414, c. 1222.]
while the rest were left behind. Bevan’s solution was to start at the other end and focus on meeting the needs of the working class.
Our current state of affairs is much the same. We need the same priorities to get to the root of the contemporary housing crisis, because while house prices in many parts of the country are eye-wateringly high for all, the reality is that higher-income earners—frustrated though some of their ambitions may be—can find a home, while too often those at the other end of the spectrum cannot. Simply flooding the market with speculative developments will not address the problem. The only way to get high-quality homes that those on waiting lists can actually afford is to directly plan and deliver housing for people on low incomes. That is why we must have council housing —not housing built to maximise profits for developers’ shareholders—offering rents linked to local incomes, and hundreds of thousands of them. I will be quoting Bevan extensively, given his achievements in delivering high-quality council housing in this country.
Iqbal Mohamed (Dewsbury and Batley) (Ind)
I congratulate my hon. Friend on securing this important debate. Since the Labour Government established the social housing policy and built the houses that were needed, the number of council houses has reduced as the Thatcher Government decided to sell those houses off. I will not object to people buying their own homes, but the Government of that time did not allow the money generated to be reinvested in social housing, so the social housing stock reduced over time and has not been replaced. Does he agree that the only way to address the issue is to replace the housing that was lost?
Chris Hinchliff
I agree with my hon. Friend and will come to right to buy later in my speech.
As Bevan described,
“the speculative builder, by his very nature, is not a plannable instrument.”—[Official Report, 6 March 1946; Vol. 420, c. 451.]
They build what makes them most money, while we need our councils empowered to assess the needs of their communities and directly deliver for them, because that is in the public interest.
Richard Burgon (Leeds East) (Lab)
My hon. Friend extensively quotes Aneurin Bevan, a man with whom he shares the honour of being unfairly suspended from the parliamentary Labour party. I am sure that, like Aneurin Bevan, he will return and go on to deliver greater things. Does he agree that a mass council house building programme could help to drive down rents in the private sector, because it is the lack of council house provision that has allowed private rents to rocket, pricing people out?
Chris Hinchliff
My hon. Friend is absolutely correct in his assessment of one of the many benefits of council housing.
The provision of council housing is uniquely important for meeting the Government’s objectives, because of the risk in designing housing policy around a target delivered by a market over which we have limited control. Once again, Bevan was right when he said that committing to general housing targets would be “crystal gazing” and “demagogic”. He also stated:
“The fact is that if at this moment we attempted to say that, by a certain date, we will be building a certain number of houses, that statement would rest upon no firm basis of veracity”.—[Official Report, 17 October 1945; Vol. 414, c. 1232.]
It is only with council housing supplied directly by public authorities that we can give real confidence to the electorate in our ability to deliver. The last time we were building 300,000 homes a year, nearly half the total was council housing, and if we want to secure an increase in construction to 1.5 million new homes over the course of this Parliament, the lion’s share of the balance must come through council housing.
Rachael Maskell (York Central) (Ind)
I am really grateful to my hon. Friend for securing today’s debate. Bevan also said that only municipal authorities could build the housing for our communities, and it was in my constituency that council housing originated, thanks to that great Committee with Wedgwood Benn and Joseph Rowntree. Does my hon. Friend agree that we need to restructure the housing revenue account debt so that local authorities can borrow more in order to build the new council housing that we need?
Chris Hinchliff
I thank my hon. Friend for that intervention, and I fully agree.
Before I get to costs, I would like us for a moment to lift our eyes to the potential prizes to be won by a new generation of council housing across the country, because council housing is not just the most effective tool we have to cut waiting lists, it is not just the best policy for transforming the futures of the tens of thousands of children going to sleep every night in temporary accommodation, and it is not just the surest way to save billions of pounds from the housing benefits bill. As if each of those were not justification enough in their own right, council housing is also the best hope we have to create the new communities that foster the sort of life and society that the labour movement has always dreamed of and strived for.
This does not seem to be debated too often in this place, but the built environment we go about our daily lives in matters profoundly. The provision of council housing is not just about progress towards social justice and the eradication of inequality; it is also about building a world around ourselves that contributes every day to the experience of self-worth, happiness, peace, connection and leisure in all our lives. If we are to be judged by future generations, not just on how many houses we build but on what we build, a policy dominated by council housing, with local authorities in the driving seat able to plan and design developments matching the hopes and identity of each community, is essential to avoiding the condemnation of history.
Far too many of the estates thrown up in recent years by the private sector have been notable mainly for their identikit and bland miserablism. Even leaving aside the appalling quality of new build housing on many speculative developments, the status quo approach that housing policy has sunk into has in effect created a new phenomenon of spiritual slums, where a near total lack of facilities or features capable of instilling any sense of interest or civic pride condemns the young to a sentence of boredom. When we are building estates with more land given to car parking than space for children to play, rising disaffection and antisocial behaviour should not be a surprise to anyone. The choice facing the Labour Government in the provision of council housing is therefore between socialism and delinquency.
Similarly, the record of private housing development when it comes to integrating nature into our lives, a basic need that we know more and more clearly is essential to our mental health, is shocking. Research has found that environmental features promised in planning conditions are not being delivered almost half of the time. Simple measures to help declining insect populations, birds, bats and other iconic species have all been regularly shirked by developers, and nearly half of the native hedges that were supposed to be laid do not exist. Once again, public goods, even when legally committed to, routinely fail to materialise when we rely on private interests to meet our nation’s housing needs.
Public-led housing—council housing—offers the opportunity for different priorities that at last deliver something better. Just as 100 years ago the Independent Labour party trailblazer Ada Salter set about housing the working class of Bermondsey while also improving their lives by planting thousands of trees and filling open spaces with flowers, so now we can have council housing that goes hand in hand with nature.
What is more, while so-called affordable housing set at 80% of market rates is often used to justify speculative developments, in reality it continues to price key workers out of many parts of the country. The promise of a new era of council housing, in which rents were linked to local incomes, would create a more democratic and less stratified society in which people of all incomes lived side by side. I would welcome the Minister’s reassurance that at least 60% of the affordable homes programme will be homes for social rent or council housing.
Prioritising council-led delivery should also mean greater public accountability for maintenance and tenant support. That, sadly, is often lacking where housing associations have moved too far from their original purpose. If we want genuinely affordable homes for those currently priced out of the housing market, better place making, greener and more integrated communities, and all the things that our constituents are demanding, so that we can go from wishing for a better society to that being the lived reality across our nation, we must have housing funded by patient capital that can focus on wider benefits, rather than mere monetary calculations.
Across the country, the evidence could not be clearer: only public funding is capable of mobilising the necessary resources at the scale required through long-term investments to deliver the public goods so conspicuously absent in recent years. Over six years, at a time of shortages, debt, constraints, and competing demands on public expenditure that were even greater than ours, the post-war Labour Government oversaw the construction of more than 800,000 council houses—some of the best ever built in this country.
Chris Hinchliff
I had better make some progress.
That is the yardstick the Government should measure themselves against. I now come at last to how we might go about achieving this. The place to start, as we have already heard, is with plugging the gap. We must stop draining our stock of council houses, year on year. It is a fact of mesmerising absurdity that in the last year of the previous Conservative Government, there was a net loss of social housing in this country, as over 20,000 homes for social rent were lost to right to buy. I welcome the determination of Labour Ministers to reform the right to buy, and to ensure that more homes are built than lost, and I especially welcome the planned 35-year exemption for newly built properties. I urge the Government to bring forward the necessary legislation for those changes as swiftly as possible.
Next, we need further planning reform to empower our local authorities to drive forward a council housing renaissance up and down the land. We need new social housing targets, to make the delivery of council housing the urgent priority of every local planning authority. Ministers must bring together local authorities and charities like Crisis to create fairer rules for eligibility for social housing, so that homeless people are no longer unfairly excluded. We need to build on the welcome measures that Ministers have already brought forward on hope value, by allowing local authorities to disregard it entirely for the purposes of purchasing land to meet housing targets. That would not only make the provision of council housing on a vastly increased scale viable by ending the payment of inflated sums of public money to wealthy landowners, slashing an estimated 38% off the total development costs of a mass-scale building programme; it would also allow local authorities to capture the full uplift in land values associated with the delivery of their local plans, and to fund projects that combine high-quality council housing with improved space for nature and expanded public infrastructure.
We must also face up to the reality of serious constraints on construction capacity due to a workforce that is too small and an inadequate supply of key materials. If we are to have the hundreds of thousands of council houses that we need in order to swiftly tackle the housing crisis, the Government should ensure that the new strategic planning authorities created through devolution have tools at their disposal to direct available resources where they are needed most, even if that means putting limits on construction for private profit.
Of course, many of our local authorities will need substantial support to rebuild the capacity necessary for a major council house building programme. As Shelter has said, in trying to balance budgets after years of funding cuts, local authorities have been forced to shut down their building operations, transfer their council stock to housing associations or focus on building private homes for sale. We will only see the council housing that our country desperately needs if we reverse that trend.
Alongside making more low-interest loans available to councils through the Public Works Loan Board, the Government should raise the money needed to invest in a new generation of local authority planners, ecologists, designers and architects through a windfall tax on the largest property developers, which have dominated the market and enjoyed super-normal profits for too long.
On funding, the Government have already committed to a transformative £39 billion over 10 years for the new affordable homes programme. I will not try the Minister’s patience by calling for additional money today, but front-loading this investment and driving it primarily towards council housing could see us well on our way.
I recognise that, even with all that, matching the scale of council housing delivery overseen by Attlee’s Government is a daunting task, but in the context of the upcoming Budget and increasingly vociferous debates on the merits of a wealth tax, I will take this opportunity to briefly fly the flag for the comparatively straightforward proposal of a levy on multiple home ownership. With so many in our society unable to access suitable housing at all, requiring those who own multiple homes to contribute to the public coffers a small percentage of the value of their additional properties would be both fair and proportionate.
That leaves a final, concluding point. The case for more council housing and what it could deliver for our society is overwhelming in its own right, but even if we were to reduce ourselves to desiccated calculating machines, concerned only with economic statistics, the irrefutable fact is that we cannot afford not to invest in hundreds of thousands of new council houses over the coming years. A major council house building programme would deliver a huge counter-cyclical boost to economic activity in every region of the country. Alongside the vast savings to be made on the cost of temporary accommodation provided by councils, there would be knock-on benefits from secure decent homes: they would reduce costs right across the public sector, from the NHS to our schools. In short, it would be fiscally reckless not to invest in a new generation of council housing.
We all deserve a warm, safe and affordable home, where we can put down roots and have the safety and security to flourish and grow. It is our duty to make that a reality. Hundreds of thousands of families cannot afford for us to delay or go slow. Now is the time for the Government to live up to their heritage and provide a new era of council housing that transforms lives up and down the country.
The Minister for Housing and Planning (Matthew Pennycook)
I congratulate the hon. Member for North East Hertfordshire (Chris Hinchliff) on securing the debate, and thank the other hon. Members who have made contributions to it.
The provision of council housing is of the utmost importance to this Government. After decades of marginalisation, we are once again asserting the necessity and value of social and council housing, as a crucial national asset to be proud of, to invest in, to protect and to maintain. Doing so is imperative, because successive Government have, for decades, failed to build sufficient numbers of social and council homes in England, and that failure is at the heart of the acute and entrenched housing crisis we face today.
As has been noted, as a result of diminished social and affordable housing supply, particularly in the wake of the coalition Government’s decision in 2010 to slash grant funding for affordable homes, over 1.3 million households now languish on local authority waiting lists, millions of low-income families have been forced into insecure, unaffordable and often substandard private rented housing, and, to our shame as a nation, over 169,000 children will go to sleep tonight in temporary accommodation. Acutely conscious that it would not be quick or easy, we entered government determined to turn that situation around, and that is precisely what we have begun to do. In the brief time available to me, I will detail how the Government are kick-starting a decade of social and affordable housing renewal, and set out the ways in which we have laid the groundwork for a reinvigoration of council house building.
As the House will know, the Government stood for election on a clear manifesto commitment to delivering the biggest increase in social and affordable house building in a generation. We did so to address the urgent need to provide homes for those for whom the market cannot cater, but also because the provision of social and affordable housing supports wider housing delivery. We know, for example, that on sites where more than 40% of homes are affordable, build-out rates are twice as fast. Boosting the supply of social and affordable homes is therefore at the heart of our efforts to ramp up housing supply more generally, and to meet housing need and housing demand in full across the country.
Matthew Pennycook
The hon. Member will know that we have not set a target as things stand, for the reasons that we have debated on many occasions, but we keep the matter under review.
Matthew Pennycook
And we have debated that issue on many, many occasions. I have given the hon. Member very detailed answers as to why, at this point in time, we have not set a target, but we will keep it under review.
As I have said, boosting the supply of social and affordable homes is at the heart of our efforts to ramp up housing supply more generally, and because direct delivery by councils has been key to high rates of house building in the past, getting councils building again is an essential part of our strategy.
On social and council housing, the Government have put their money where their mouth is. As the hon. Member for North East Hertfordshire made clear, at the spending review we announced £39 billion for a successor to the affordable homes programme over 10 years from 2026-27 to 2035-36. I can confirm that given the priority this Government accord to social rented housing, at least 60% of homes delivered through the programme will be for social rent.
Accurately forecasting long-term delivery is inherently challenging—that is one of the reasons we have not set a social affordable housing target to date—but we believe our grant-funded social and affordable homes programme could deliver around 300,000 social and affordable homes over its lifetime, with around 180,000 being for social rent. The programme will continue to support regeneration schemes that provide a net increase in homes. It will also permit a limited number of acquisitions. We know these two delivery avenues are important to councils, including those with older homes and those who are looking to rapidly grow their housing portfolios to deal with acute local pressures. We also recognise that certain types of much-needed social and affordable housing can cost more to deliver, including those built by councils. That is why the programme has been designed to be flexible in order to support the greater diversity of supply required, with councils encouraged not to self-censor when coming forward with bids.
To improve financial capacity, to deliver new supply and support long-term planning, for the first time, we announced a 10-year social housing rent policy at the spending review. In addition, we have recently completed a consultation on how to implement a social rent convergence mechanism, the outcome of which will be confirmed at the autumn Budget. The inclusion of this mechanism will be beneficial to councils, with many authorities letting homes below formula rent. Both these measures will support their capacity to borrow and invest in new and existing homes.
Beyond investment, we have developed a series of measures designed to enhance councils’ confidence, capacity and capability to deliver, and I want to cover some of them as they directly address the subject of the debate. As the hon. Gentleman is aware and has noted, one of the Government’s earliest acts was to introduce transformative changes to the right to buy. We want to retain a scheme that helps long-standing tenants to buy their own homes, but we could not ignore the detrimental impact the right to buy was having on existing stock and councils’ confidence to deliver new social and affordable housing. So we took decisive action to deliver a fairer, more sustainable scheme that provides better value for money and creates the certainty for councils to once again build at scale. Changes that have already come into effect include returning the maximum cash discounts to between £16,000 and £38,000. We have also enabled councils to keep 100% of their right to buy receipts for reinvestment in new and existing homes. But we will not stop there. Following consultation, we will legislate for a more comprehensive set of reforms when parliamentary time allows. These reforms will include a 35-year exemption from the scheme for newly built homes, and a first option for councils to repurchase homes acquired through right to buy if they are sold on. On top of this, from 2026-27, we will act on a long-standing ask from councils by allowing them to combine right to buy receipts with grant funding from the social and affordable homes programme.
In addition to revenue generated from sales through right to buy and capital subsidy, we know how important borrowing is to councils’ delivery plans. Since 2023, a preferential borrowing rate has been available from the Public Works Loan Board for council house building. So far, this preferential rate has enabled councils to borrow £6 billion for investment in new and existing homes. I am conscious that this rate is due to expire at the end of this financial year, and recognise the calls from councils for long-term certainty. Considering this, we will confirm our approach to this discounted rate at the autumn Budget.
Many of the measures I have mentioned so far relate to councils’ financial capacity, yet we know—the hon. Gentleman again mentioned this—that the challenges they face are not solely financial, and that as rates of delivery have declined in recent decades, so too have the skills and capacity of their housing teams. In response, in partnership with Homes England and the Local Government Association, we have launched the council house building skills and capacity programme, backed by £12 million of funding this year. This programme aims to upskill councils’ existing workforces, recruit and train new graduates to become qualified surveyors and construction project managers, and drive engagement with the social and affordable homes programme.
To conclude, this Government remain firmly committed to delivering the biggest increase in social and affordable house building in a generation. Within that commitment, we have prioritised the delivery of social rented homes, and we are taking steps to enable councils—whether those already delivering or those with closed housing revenue accounts who want to deliver—to once again build at scale. We have achieved an incredible amount over the space of just 14 months, but there is much more to come. We will continue to engage with councils and pull every lever at our disposal to increase their confidence, capacity and capability to deliver the social homes that low-income families across the nation need to live, grow and build a better life for themselves.
Question put and agreed to.