Theresa May’s missed opportunity: why councils should be able to borrow to build homes

Council housing in Southwark, south London. Image: Getty.

A Southwark Labour councillor on the housing crisis.

Across the country, housing supply is falling behind demand year on year.  The result is a housing crisis with high private rents, home ownership a distant dream, and families stuck on waiting lists for affordable homes.

Before Theresa May’s speech at their conference the Tories had briefed the press that there would be a significant announcement on taking action to tackle the housing crisis with new council homes front and centre. There was hope that we would see an end to the Thatcherite consensus on housing we’ve had for 40 years, which assumes that the private sector will build the new homes we need.

So when May said the government was going to put an extra £2bn towards affordable housing I felt a huge sense of frustration and anger at yet another missed opportunity for the government to actually help people. While funding for an additional 5,000 affordable homes a year is welcome, the reality is we need to be building an additional 130,000 homes a year – so it’s clear this simply won’t tackle the scale of the housing crisis.

This crisis is real: across the country, 1.2m families are on the waiting list for council housing, and in my own borough of Southwark in south London, we still have 10,000 families waiting for a council home. That’s 1.2m families who don’t have an affordable place to raise their children or a secure place to retire in, who are trapped in unsuitable or overcrowded accommodation.

The government’s other recent announcement on housing is going to do even less to help solve the housing crisis. An extra £10bn for Help to Buy does nothing to help anyone on a waiting list for a council home. It won’t even help many first time buyers as it will inflate property prices further, and as the IPPR have argued it will help people who could already afford it to buy and push prices up for those who already can’t get a foot on the ladder.

So let’s talk about what would have helped: giving councils the ability to borrow against existing housing stock. 

Southwark Council owns 55,000 council homes; these are assets worth billions of pounds. But we are limited in borrowing against them by national government. This isn’t because this would cause huge financial instability for councils – housing associations can already borrow against their existing stock to build new homes. If we could do the same, we would be able to generate the funds to build more genuinely affordable homes, including large numbers of council homes and then use the rents generated to repay the loans.

The government also needs to act to increase the land available to build on by giving councils the power to buy land closer to its actual use value. This would mean that the uplift in land value from development could be used for the public good such as building council homes, schools, and parks. The main beneficiaries from the current system are land speculators.

Sadly this week has made it very clear that the government is not serious about tackling the housing crisis – so the burden remains on local authorities. In Southwark we have pledged to build 11,000 new council homes by 2043: an ambitious target, but one we are determined to meet. We are funding this through a combination of Right to Buy receipts, some private sale to cross-subsidise and the very limited borrowing we are allowed. We are also very fortunate in Southwark that we are in central London, on the banks of the Thames, and can generate funding through planning agreements with developers which we can then use to build council homes. The majority of local authorities are not so fortunate.

The only solution to the housing crisis is to build more homes, and particularly more council homes. Labour have pledged that the next Labour government will deliver the biggest council house building programme in 30 years – and do so with the consent of existing residents. We are very clear in Southwark that consultation and working in partnership with our residents is vital.

We will keep doing everything we can to make sure all of our residents have a decent place to call home, but with diminishing resources, and the inability to borrow the money we need to build, we’ll have to wait for the next Labour government under Jeremy Corbyn for housebuilding on the scale our country needs.

Cllr Mark Williams is a Labour councillor and cabinet member for regeneration & new homes at the London Borough of Southwark.

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Mayor Marvin Rees' hope for Bristol: A more equitable city that can 'live with difference'

“I call on everyone to challenge racism and inequality in every corner of our city," Bristol Mayor Marvin Rees says. (Matt Cardy/Getty Images)

When the statue of 18th century slave trader Edward Colston was torn from its plinth and dumped in Bristol’s harbour during the city’s Black Lives Matter protests on 7 June, mayor Marvin Rees was thrust into the spotlight. 

Refraining from direct support of the statue’s removal, the city’s first black mayor shared a different perspective on what UK home secretary Priti Patel called “sheer vandalism”:

“It is important to listen to those who found the statue to represent an affront to humanity,” he said in a statement at the time. “I call on everyone to challenge racism and inequality in every corner of our city and wherever we see it.”

48 year-old Rees, who grew up in the city, has since expanded on his approach to the issue in an interview with CityMetric, saying “wherever you stand on that spectrum, the city needs to be a home for all of those people with all of those perspectives, even if you disagree with them.”

“We need to have the ability to live with difference, and that is the ethnic difference, racial difference, gender difference, but also different political perspectives,” he added. “I have been making that point repeatedly – and I hope that by making it, it becomes real.” 

What making that point means, in practice, for Rees is perhaps best illustrated by his approach to city governance.

Weeks after the toppling of Colston’s statue, a new installation was erected at the same spot featuring Jen Reid, a protester of Black Lives Matter. However, the installation was removed, as “it was the work and decision of a London-based artist, and it was not requested and permission was not given for it to be installed”, Rees said in a statement.

Bristol may appear a prosperous city, logging the highest employment rate among the UK’s “core cities” in the second quarter of 2019. But it is still home to many areas that suffer from social and economic problems: over 70,000 people, about 15 percent of Bristol’s population, live in what are considered the top 10 percent most disadvantaged areas in England. 

In an attempt to combat this inequality, Rees has been involved in a number of projects. He has established Bristol Works, where more than 3,000 young people from economically disadvantaged backgrounds are given work experience opportunities. And is now setting up a commission on social mobility. “Launching a Bristol commission on social mobility is not only about social justice; it [should not be] possible for a modern city to leave millions of pounds worth of talent on the shelf, just because the talent was born into poverty,” he says.

The mayor is also a strong supporter of the UN’s Sustainable Development Goals (SDGs), explaining that SDGs offer a way to talk about sustainability within a framework of many issues, ranging from climate change and biodiversity to women’s issues, domestic violence, poverty and hunger.

“What we want to achieve as a city cannot be done as a city working alone,” he insists. “We don’t want to benefit only people inside Bristol, we want to benefit the planet, and the SDGs offer a framework for a global conversation,” suggesting that a vehicle should be launched that allows cities to work together, ideally with organisations such as the UN, the World Bank and the International Monetary Fund involved. 

Greater collaboration between cities would be “beneficial in terms of economies of scale,” he argues, “as cities could get more competitive prices when buying materials for building houses or ordering buses, rather than each city acquiring a few of them at a higher price.”

In an attempt to focus on the long term, Rees launched One City Plan in January 2019, setting out a number of goals for Bristol to achieve by 2050.

Investing in green infrastructure to meet 2030 carbon emission targets spelled out in the SDGs is a key area here, with the mayor noting that transport, mass transit and energy are important sectors looking for further investment and government funding: “The sooner we meet our targets, the sooner we will benefit from them, and invest in sectors that will provide people with jobs.”

Jobs, especially following the outbreak of Covid-19, are of paramount importance to Rees. Bristol’s council wants to ensure that any government money given to the city will be quickly passed on to businesses to help prevent redundancies, he says, though given that mass job losses seem inevitable, reskilling options are also being looked into, such as through a zero-carbon smart energy project called City Leap.

Another important area for investment in Bristol is affordable housing, with 9,000 homes already built under Rees’s term of office. “People could build a base for life with affordable housing, [and this would mean] their mental health would be better because they have a safe place,” he explains. “Children in families that have a home that is affordable are more likely to able to eat and to heat, [and they are more likely to enjoy a] better education.”

Taken in the round, Rees’s agenda for Bristol is its own blueprint for shaping history. The Colston statue now lies in safe storage, with a local museum likely to play host to the controversial monument. But the Black Lives Matters protestors were fighting for a fairer, more equal future, and it is here where Rees is determined to deliver.

Sofia Karadima is a senior editor at NS Media Group.