Five thoughts about Theresa May’s promise to get councils building houses again

The silliest picture of Theresa May giving her speech we could find. Image: Getty.

1. This is big.

Housing is a policy area infested with numbers that sound big but actually aren’t. “An extra 50,000 homes!” is a lot of homes – except we need to be building 200,000-300,000 a year, so it actually isn’t. By the same token, the government’s recent promise of an extra £2bn for affordable housing sounds huge – except it’s spread over 10 years, and is a tiny fraction of the amount the previous chancellor George Osborne cut from the relevant budgets.

In fairness, though, one should acknowledge when things that sounds small are actually big – and the housing policy Theresa May announced in her speech to Tory conference in Birmingham earlier today appears to be one of them. Here’s the key quote:

“The last time Britain was building enough homes – half a century ago – local councils made a big contribution. We’ve opened-up the £9bn Affordable Housing Programme to councils, to get them building again. And at last year’s conference I announced an additional £2bn for affordable housing.

“But something is still holding many of them back. There is a government cap on how much they can borrow against their Housing Revenue Account assets to fund new developments.

“Solving the housing crisis is the biggest domestic policy challenge of our generation. It doesn’t make sense to stop councils from playing their part in solving it.

“So today I can announce that we are scrapping that cap.”

If we take this at face value – a fairly big if – it potentially means that ambitious councils could borrow money against future rents and use it to start building again, at significant scale. And that will give them more rents, which means they can borrow more money.

And that, unlike the £2bn, really is quite a big deal.

2. It’ll allow counter-cyclical building, and so make the market more resilient.

One of problems with the way Britain’s housing market is currently constituted is that it’s so painfully cyclical. Construction firms outbid each other for promising plots of land, pushing the price up in the process – but that locks them into particular sales price targets for the homes they build on that land. If house prices fall, firms will stop building, until they start to rise again. We’re stuck.

Empowering councils will help to break that cycle, by ensuring that there are bodies with an interest in building new homes, even in down years. And so, if the government is serious about increasing the number of new homes this country builds, this is a good way to do it.

3. It’s actually not that big a surprise.

One of the things that caught me off guard at Tory conference last year was when an elderly man who had held senior roles in several ultra-Thatcherite think tanks told me he thought the state should build homes again. This wasn’t the only time I heard this from a Tory, but he was one of the most surprising Tories to hear it from.

So in some ways, this isn’t actually that radical a shift from May, merely a reflection of where Tory thinking had got to.


4. It amounts to devolving the debt.

While chancellor, George Osborne famously “devolved the axe” – slashing council budgets in an attempt to ensure his cuts were viewed as a local, not national, government phenomenon. It worked, in so far as councils are struggling on with about half the money they used to have, and are only now starting to fall over.

But fall over they will: only Northamptonshire has gone so far, but no one in local government thinks it’ll be the last. A few weeks back, the thought occurred to me that, when taxes are raised to stem the ensuing crisis, a canny chancellor might devolve that, too: granting a measure of fiscal autonomy to councils not because they believed in devolution, but because they didn’t want the blame for the inevitable tax rises.

We are some way off that, still, but this is a policy of the same flavour. Fixing the housing crisis will require the state to borrow, in direct contravention of the logic that has dominated Tory economic policy for last decade. But it doesn’t have to be the nation state doing that borrowing: why not let councils do it instead?

5. I have questions about capacity.

The devil in these things always in the detail. It’s easy to make a speech (although 2017 Theresa May might disagree); actually turning it into policy a different thing. Perhaps the Treasury will reassert itself: perhaps councils won’t simply be able to borrow as much as they want against rental income, but will be constrained in some way. We’ll see.

There’s another question: back in the days when councils used to be biggest builders in Britain, every local authority had an enormous store of in-house expertise to draw on: not just planners but architects, surveyors, and everyone else involved in creating new housing. Most councils don’t have that any more: construction expertise is now concentrated overwhelmingly in the private sector. That may yet limit the amount of homes that councils can bring forward in the short term.

All that said, if you care about solving the housing crisis, this looks suspiciously like good news. So, yay, say I.

Jonn Elledge is the editor of CityMetric. He is on Twitter as @jonnelledge and on Facebook as JonnElledgeWrites.

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The tube that’s not a tube: What exactly is the Northern City line?

State of the art: a train on the Northern City Line platforms at Moorgate. Image: Haydon Etherington

You may never have used it. You may not even know that it’s there. But in zones one and two of the London Underground network, you’ll find an oft-forgotten piece of London’s transport history.

The Northern City line is a six-stop underground route from Moorgate to Finsbury Park. (It’s officially, if confusingly, known as the Moorgate line.) But, unlike other underground lines, it not part of Transport for London’s empire, and is not displayed on a normal tube map. Two of the stations, Essex Road and Drayton Park, aren’t even on the underground network at all.

The line has changed hands countless times since its creation a century ago. It now finds itself hiding in plain sight – an underground line, not part of the Underground. So why exactly is the Northern City line not part of the tube?

The Northern City line, pictured in dotted beige. Source: TfL.

As with many so many such idiosyncrasies, the explanation lies in over a century’s worth of cancellations and schemes gone awry. The story starts in 1904, when the private Great Northern Railways, which built much of what is now the East Coast Main Line, built the line to provide trains coming from the north of London with a terminus in the City. This is why the Northern City line, unlike a normal tube line, has tunnels wide enough to be used by allow mainline trains.

Eventually, though, Great Northern decided that this wasn’t such a bright idea after all. It mothballed plans to connect the Northern City up to the mainline, leaving it to terminate below Finsbury Park, scrapped electrification and sold the line off to Metropolitan Railways – owners of, you guessed it, the Metropolitan line.

Metropolitan Railways had big plans for the Northern City line too: the company wanted to connect it to both Waterloo & City and Circle lines. None of the variants on this plan ever happened. See a theme?

The next proposed extensions, planned in the 1930s once London Underground had become part of the domain of the (public sector) London Passenger Transport Board, was the Northern Heights programme. This would have seen the line would connected up with branch lines across north London, with service extended to High Barnet, Edgware and Alexandra Palace: essentially, as part of the Northern line. The plans, for the main part, were cancelled in the advent of the Second World War.

The Northern Heights plan. The solid green lines happened, the dotted ones did not. Image: Rob Brewer/Wikimedia Commons.

What the war started, the Victoria line soon finished. The London Plan Working Party Report of 1949 proposed a number of new lines and extensions: these included extension of the Northern City Line to Woolwich (Route J) and Crystal Palace (Route K). The only one of the various schemes to happen was Route C, better known today as the Victoria line, agreed in the 1950s and opening in the 1960s. The new construction project cannibalised the Northern City Line’s platforms at Finsbury Park, and from 1964 services from Moorgate terminated one stop south at Drayton Park.

In 1970, the line was briefly renamed the Northern Line (Highbury Branch), but barely a year later plans were made to transfer it to British Rail, allowing it to finally fulfil its original purpose.


Before that could happen, though, the line became the site of a rather more harrowing event. In 1975, the deadliest accident in London Underground history took place at Moorgate: a southbound train failed to stop, instead ploughing into the end of the tunnel. The crash killed 43 people. The authorities responded with a major rehaul of safety procedure; Moorgate station itself now has unique timed stopping mechanisms.

The last tube services served the Northern City Line in October 1975. The following year, it reopened as part of British Rail, receiving trains from a variety of points north of London. Following privatisation, it’s today run by Govia Thameslink as the Great Northern route, served mainly by suburban trains from Hertford and Welwyn Garden City.

Nowadays, despite a central location and a tube-like stopping pattern, the line is only really used for longer-scale commutes: very few people use it like a tube.

Only 811,000 and 792,000 people each year enter and exit Essex Road and Drayton Park stations respectively. These stations would be considered the fifth and sixth least used in the tube network – only just beating Chorleywood in Hertfordshire. In other words, these usage stats look like those for a station in zone seven, not one in Islington.

One reason for this might be a lack of awareness that the line exists at all. The absence from the tube map means very few people in London will have heard of it, let alone ever used it.

Another explanation is rather simple: the quality of service. Despite being part and parcel of the Oyster system, it couldn’t be more different from a regular tube. The last (and only) time I used the line, it ran incredibly slowly, whilst the interior looked much more like a far-flung cross-country train than it does a modern underground carriage.

Waiting for Govia. Image: Haydon Etherington.

But by far the biggest difference from TfL is frequency. The operators agreed that trains would run between four and six times an hour, which in itself is fine. However, this is Govia Thameslink, and in my experience, the line was plagued by cancellations and delays, running only once in the hour I was there.

To resolve this, TfL has mooted taking the line over itself. In 2016, draft proposals were put forward by Patrick McLoughlin, then the transport secretary, and then mayor Boris Johnson, to bring "northern services... currently operating as part of the Thameslink, Southern and Great Northern franchise" into TfL's control by 2021.

But, in a story that should by now be familiar, Chris Grayling scrapped them. At least it’s in keeping with history.