Town halls bid to build next generation of council housing

LGA press release - 4 September 2009

Town halls across the country are bidding to build the next generation of council housing a new report published today reveals.

The report by the Local Government Association says that the number of councils bidding into a £100m package to build new affordable homes has exceeded expectations and the funding pot could be oversubscribed.

The Homes and Communities Agency, which is overseeing the bidding process, has not disclosed which town halls have applied. But LGA research shows that bids have been received from councils in all regions of the country and highlights examples from London, the South East, the West Midlands and Yorkshire.
 
The increased scope for councils to deliver new homes will help some town halls get their house-building plans off the ground. But councils have the appetite and ambition to do much more.
 
A report published by the LGA in June revealed that root and branch reform of the council housing finance system could see more than 300,000 new homes being built, providing a £72.5 billion boost to the economy over ten years. The LGA is calling for:

• Town halls to be allowed to keep all the money raised through rent and sales of all council owned housing to re-invest in new and existing homes
• Councils to have more freedom to borrow against future rental income to invest in    new housing
• Reduced bureaucracy for councils to access grant funding
• Councils to be able to access mainstream funding for house building on the same basis as Housing Associations and private developers, rather than making them bid for separate pots of funding.

Sir Jeremy Beecham, Vice-Chair of the Local Government Association, said:

“Councils are up for the challenge of building the affordable homes this country so desperately needs. Up and down the country, town halls are ready and willing to embark on the most significant programme of house building for a generation. But this will not see a return to stereotypes of poorly designed, monolithic council estates.  These homes will be built to high environmental and quality standards in attractive, mixed communities to meet the needs of local areas for years to come.

“The government’s funding pot for new homes is over-filling with demand, and there is a compelling case for freeing up more resources. Repossessions, mortgage arrears and unemployment are fuelling demand for social housing. At the same time hundreds of thousands of jobs in the construction industry have been lost. Allowing councils to build new homes would help plug this gap and be a huge shot in the arm for the economy.

“As the recession continues to bite and more and more people struggle to find a roof over their heads, it is more important than ever to give town halls extra powers over housing. Councils want to create places where people are proud to live.”

ENDS

NOTES TO EDITOR:
A £100m package to fund 900 local authority-built affordable homes was announced in the Budget in April 2009.  In June, the package was extended with the aim of delivering a further 3,000 homes by March 2011.

Examples of the type of schemes submitted by councils for the first round of bidding include:

Broxtowe Borough Council has submitted a bid for funding to build nine new council properties at a value of some £1.3m.

Broxtowe is one of the few councils in England with experience of building properties in recent years and it will be drawing upon this in its plans for further development.

Oxford City Council has submitted two bids for the HCA local authority new-build fund in the July round for a total value of about £12.4m. The two schemes will provide thirty three re-modelled sheltered homes and fifty eight new homes with an estimated completion time by April 2011.

The council had previously been looking only at regeneration, refurbishment and remodelling programmes, not new build. The announcement of the HCA funding was therefore seen as an opportunity to tackle the impacts of the recession and ensure a continuation in the supply of affordable housing.

Oxford council is committed to providing more affordable housing to meet current and future needs in and around the City by delivering an average of 250 affordable new homes each year.

Greenwich Council is very eager to continue its recognised excellent work in providing housing services to its residents following its selection as a Beacon authority. The council has submitted a bid for HCA funding for 8 sites providing about 47 homes.

There is a strong demand for family homes in the borough and given the current difficulties in building private developments, and the knock-on effect this has on delivering affordable homes as part of private developments, the opportunity to deliver affordable larger family homes within council ownership has been seen as particularly important.

Sandwell Metropolitan Borough Council has submitted a bid to build 28 new affordable council homes in Smethwick for a cost of over £3million. 
There is a clearly established demand for affordable housing for younger people and larger families in Smethwick that this new development will aim to address.
Sandwell MBC is currently assessing the feasibility of submitting another bid for the October round to build a further 100 affordable units in line with its strategic objective to deliver 1,000 new council homes over the next 10 years.