Local Authority Housing

Matt Western Excerpts

Wednesday 20th December 2017 Commons Chamber

[The Minister for Housing and Planning (Alok Sharma)]

I congratulate the hon. Member for Stroud (Dr Drew) on securing this important debate on local authority housing, and I commend him on the manner in which he has presented his point of view.

Successive Governments over many decades have not overseen the building of enough homes in the right places. We are determined to address that, and we are making progress. Last year, there was a net addition of 217,000 homes across England—the highest number in almost a decade—and housing was front and centre in the recent Budget, in which there was a commitment of at least £44 billion over the next five years to address the broken housing market. That includes the £15 billion of new financial support announced in the Budget—the biggest budget for housing in decades. More money was announced for infrastructure and to help small and medium-sized builders. There were more financial guarantees for the house building sector and a revamp of a more muscular Homes and Communities Agency; and, of course, there was more support for local authorities to get more homes built. I will return to that point shortly.

Of course, providing good-quality, affordable homes for people who need them most is an absolute priority for this Government—Members on both sides of the House can all agree on that—and we are making progress on delivering those homes. Since 2010, more than 357,000 new affordable homes have been delivered through the affordable homes programme, including 128,000 homes for social rent, but we recognise that there is much more to do. That was why the Prime Minister recently announced an extra £2 billion to deliver new affordable housing, including for social rent, taking our total investment in the affordable homes programme between 2016 and 2021 to £9 billion. David Orr, the chief executive of the National Housing Federation, described that extra money as

“a watershed moment for the nation.”

Local authorities, as well as housing associations, will be able to bid for the money, which will go where it is most needed—areas of acute affordability pressure.

As the hon. Member for Stroud mentioned, the Budget provided a further boost through the decision to increase local authority housing revenue account borrowing caps by a total of £1 billion. The hon. Member for Brighton, Kemptown (Lloyd Russell-Moyle) talked about increasing HRA headroom and, as at 31 March 2017, there was £3.5 billion of headroom available in housing revenue accounts across England. Again, we will deploy that £1 billion in areas of high affordability pressure where authorities are ready to start building.

Stroud District Council has previously raised the issue of the borrowing cap with my Department and, as the hon. Member for Stroud noted, its leaders have written to the Prime Minister. I sense that the decision to lift the HRA caps by up to £1 billion is welcome news. From 2019-20, local authorities will be able to bid for increases in their caps of up to a total of £1 billion by the end of 2021-22. We will be releasing information in the spring on how councils can apply for an increase in their HRA cap.

The Budget also more than doubled investment in the housing infrastructure fund to £5 billion, and of course an additional £400 million has been made available to regenerate run-down estates. On top of all that extra funding, we are giving local authorities and housing associations more certainty over their rental income up to 2025. From 2020, they will be able to increase rents by up to CPI plus 1%, and the feedback I have received suggests that the sector will build more homes more quickly as a direct result of receiving that certainty.

All of that—rent certainty, additional HRA borrowing and billions for new affordable housing—affirms our commitment as a Government to building social housing. I know that Stroud District Council, like other local authorities and many housing associations to which I have spoken, welcomes these measures.

[Matt Western (Warwick and Leamington) (Lab)]

Does the Minister accept that many authorities are struggling, particularly with the allocation of housing through developers? The viability studies supposedly always prevent such houses being built. As we have recently seen with Persimmon, the lack of viability is purely because the developers do not make enough profit. They are in fact making huge profits, but there are just no teeth available to local authorities.

[Alok Sharma]

I will address that point, because it was also raised by the hon. Member for Stroud. I agree it is important that developers build the required amount of affordable homes.