Theresa May's promise to let councils build is a big step forward for housing policy. But more action is still needed

The New Era Estate, Hoxton. Image: Getty.

Theresa Mays recent conference speech shows how housing continues to rise up the political agenda: the Prime Minister said that, “solving the housing crisis is the biggest domestic policy challenge of our generation”. For a number of Conservatives, who look anxiously at their approval rates amongst younger voters, having a meaningful housing policy offer is looking like a necessity if the party is to retain power.

Coming at the end of a conference dominated by Brexit and party management, and which saw little by the way of policy announcements, the contents of Theresa Mays speech on Wednesday afternoon came as a surprise to many. Not least to those in the world of housing policy who have welcomed the news that councils are to be free to borrow in order to build housing once more, with a mixture of both glee and disbelief.

So, what does it mean that councils will now be able to build? Due to central government policy, local councils are prevented from borrowing prudently against their Housing Revenue Account (HRA) to build genuinely affordable housing. This was always an ideologically driven, dysfunctional policy which was strongly contested by local authorities who wanted to do their bit to address the drastic shortfall of affordable housing.

IPPR and many others have argued for a long time that the borrowing cap imposed on local authorities should be lifted, so Theresa Mays announcement should therefore be warmly welcomed. It is certainly a major shift in the governments approach to housing policy. However, it is worth noting the limits of the policy.

It will take time for councils who have not developed new housing for some years to build up their capacity, meaning it may take time before the impacts of this change can start to be felt. Once up and running though, councils will be able to deliver around 15,000 homes a year according to propery consultancy Savills; the government estimates a more conservative 10,000 a year. 

But while this will be a key source of affordable housing, alone it will not meet the current shortfall. As such, councils must be seen as a part of the solution to and should not be unfairly expected to solve the affordable housing crisis alone.

At the same time, it will be essential that local authorities are putting their balance sheet to best use, ensuring that the homes that they are building are genuinely affordable. In the last few years, affordable rented homes, where rents are set at 80 per cent of market rates, have dominated supply. IPPR research has shown that, across the country, these so-called affordable rents are simply too expensive for many households on low incomes. Therefore, councils need to build homes at social rent.

Finally, existing policy may also undermine the ability of councils to develop new housing. Significant cuts to council budgets may limit the ability of local authorities to build up the staff needed to deliver new housing projects. Meanwhile, the continued existence of the Right to Buy may prove a significant barrier to council-built projects. As Peter Apps, the news editor of Inside Housing, notes, with up to 13,000 Right to Buy sales a year, even with new delivery the shortfall of new council homes could be up to 3,000 a year.

Overall though, the freeing of councils to borrow is a wider signal that the government has shifted from its ideological aversion to social housing and state provision. Those who argue that only radical solutions are sufficient to challenge the scale of the housing crisis are leading the debate. This opens up the opportunity for more ambitious reform to the housing system.

However, housing policy remains still too siloed, failing to take stock of the systemic issues which cause the housing crisis. For example, a lack of action on our dysfunctional land market could present a further challenge to the ambitions of local authorities.

On average in 2016, the price of land had risen to more than 70 per cent of the price paid for a house, and new IPPR projections suggest that, on current trends, this will rise to 83 per cent over the next 20 years. The high cost of land will be a key barrier to local authority building projects.

Government should complement the ability for councils to borrow with reform to new powers over the land market to truly get them building. In a recent report IPPR argued that planning authorities should be able to zone land for development and freeze its price. Councils would then either buy the land at the price, with reasonable compensation for the landowner, and sell it on to developers at the higher price; or would enter into a partnership with the landowner to share the proceeds of the sale.

Allowing local authorities to build is a great step forward and the shift in thinking it signals is important. However, more work is still to be done to fully get to grips with the issues facing the housing market and to deliver the level of new affordable housing that we need.

Darren Baxter is a Research Fellow at IPPR. He tweets @DarrenBaxter.


What’s killing northerners?

The Angel of the North. Image: Getty.

There is a stark disparity in wealth and health between people in the north and south of England, commonly referred to as England’s “north-south divide”. The causes of this inequality are complex; it’s influenced by the environment, jobs, migration and lifestyle factors – as well as the long-term political power imbalances, which have concentrated resources and investment in the south, especially in and around London.

Life expectancy is also lower in the north, mainly because the region is more deprived. But new analysis of national mortality data highlights a shockingly large mortality gap between young adults, aged 25 to 44, living in the north and south of England. This gap first emerged in the late 1990s, and seems to have been growing ever since.

In 1995, there were 2% more deaths among northerners aged 25 to 34 than southerners (in other words, 2% “excess mortality”). But by 2015, northerners in this age group were 29% more likely to die than their southern counterparts. Likewise, in the 35 to 44 age group, there was 3% difference in mortality between northerners and southerners in 1995. But by 2015, there were 49% more deaths among northerners than southerners in this age group.

Excess mortality in the north compared with south of England by age groups, from 1965 to 2015. Follow the lines to see that people born around 1980 are the ones most affected around 2015.

While mortality increased among northerners aged 25 to 34, and plateaued among 35 to 44-year-olds, southern mortality mainly declined across both age groups. Overall, between 2014 and 2016, northerners aged 25 to 44 were 41% more likely to die than southerners in the same age group. In real terms, this means that between 2014 and 2016, 1,881 more women and 3,530 more men aged between 25 and 44 years died in the north, than in the south.

What’s killing northerners?

To understand what’s driving this mortality gap among young adults, our team of researchers looked at the causes of death from 2014 to 2016, and sorted them into eight groups: accidents, alcohol related, cardiovascular related (heart conditions, diabetes, obesity and so on), suicide, drug related, breast cancer, other cancers and other causes.

Controlling for the age and sex of the population in the north and the south, we found that it was mostly the deaths of northern men contributing to the difference in mortality – and these deaths were caused mainly by cardiovascular conditions, alcohol and drug misuse. Accidents (for men) and cancer (for women) also played important roles.

From 2014 to 2016, northerners were 47% more likely to die for cardiovascular reasons, 109% for alcohol misuse and 60% for drug misuse, across both men and women aged 25 to 44 years old. Although the national rate of death from cardiovascular reasons has dropped since 1981, the longstanding gap between north and south remains.

Death and deprivation

The gap in life expectancy between north and south is usually put down to socioeconomic deprivation. We considered further data for 2016, to find out if this held true for deaths among young people. We found that, while two thirds of the gap were explained by the fact that people lived in deprived areas, the remaining one third could be caused by some unmeasured form of deprivation, or by differences in culture, infrastructure, migration or extreme weather.

Mortality for people aged 25 to 44 years in 2016, at small area geographical level for the whole of England.

Northern men faced a higher risk of dying young than northern women – partly because overall mortality rates are higher for men than for women, pretty much at every age, but also because men tend to be more susceptible to socioeconomic pressures. Although anachronistic, the expectation to have a job and be able to sustain a family weighs more on men. Accidents, alcohol misuse, drug misuse and suicide are all strongly associated with low socioeconomic status.

Suicide risk is twice as high among the most deprived men, compared to the most affluent. Suicide risk has also been associated with unemployment, and substantial increases in suicide have been observed during periods of recession – especially among men. Further evidence tells us that unskilled men between ages 25 and 39 are between ten and 20 times more likely to die from alcohol-related causes, compared to professionals.

Alcohol underpins the steep increase in liver cirrhosis deaths in Britain from the 1990s – which is when the north-south divide in mortality between people aged 25 to 44 also started to emerge. Previous research has shown that men in this age group, who live in the most deprived areas, are five times more likely to die from alcohol-related diseases than those in the most affluent areas. For women in deprived areas, the risk is four times greater.

It’s also widely known that mortality rates for cancer are higher in more deprived areas, and people have worse survival rates in places where smoking and alcohol abuse is more prevalent. Heroin and crack cocaine addiction and deaths from drug overdoses are also strongly associated with deprivation.

The greater number of deaths from accidents in the north should be considered in the context of transport infrastructure investment, which is heavily skewed towards the south – especially London, which enjoys the lowest mortality in the country. What’s more, if reliable and affordable public transport is not available, people will drive more and expose themselves to higher risk of an accident.

Deaths for young adults in the north of England have been increasing compared to those in the south since the late 1990s, creating new health divides between England’s regions. It seems that persistent social, economic and health inequalities are responsible for a growing trend of psychological distress, despair and risk taking among young northerners. Without major changes, the extreme concentration of power, wealth and opportunity in the south will continue to damage people’s health, and worsen the north-south divide.

The Conversation

Evangelos Kontopantelis, Professor in Data Science and Health Services Research, University of Manchester

This article is republished from The Conversation under a Creative Commons license. Read the original article.