We are calling on Government to do more to rapidly build more genuinely affordable homes to help families struggling to meet housing costs, provide homes to rent, reduce homelessness and tackle the housing waiting lists many councils have.
About the Local Government Association
- The Local Government Association (LGA) is the national voice of local government. We are a politically led, cross party membership organisation, representing councils from England and Wales.
- Our role is to support, promote and improve local government, and raise national awareness of the work of councils. Our ultimate ambition is to support councils to deliver local solutions to national problems.
Key messages
- Over recent decades, construction of new homes has failed to keep pace with population growth and social changes. At the same time, there are currently not enough affordable homes to meet current demand with more than 1.2 million households on council waiting lists in England and over 104,000 households living in temporary accommodation.
- We are calling on Government to do more to rapidly build more genuinely affordable homes to help families struggling to meet housing costs, provide homes to rent, reduce homelessness and tackle the housing waiting lists many councils have. We are calling for the Government to go further and faster in order for councils to be able to properly resume their historic role as a major builder of affordable homes by implementing a six-point plan for social housing.
- This housing shortage has seen rents and property prices rise significantly faster than incomes, acutely impacting the lowest income and vulnerable families and individuals. Recent Government measures to ensure registered providers of social housing in England and Northern Ireland are not liable for Stamp Duty Land Tax (SDLT) when purchasing property with a public subsidy, and that public bodies will be exempted from the 15 per cent anti-avoidance rate of SDLT, are positive steps in the right direction to boosting the supply of social housing by reducing the costs for registered providers of social housing to acquire new properties.
- At a time of acute housing shortages, the LGA is calling for major reforms to the Right to Buy scheme by giving councils control over how and when monies raised through the scheme should be used on the development, delivery or acquisition of new homes, power to protect a council’s financial investment in both existing and new social housing stock from a loss-making transaction, and flexibility for councils to shape the scheme locally so it works best for their local area, housing market and people.
- Councils spent £1.74 billion on temporary accommodation in 2022-23 alone. With the number of Section 21 ‘no fault’ evictions increasing, as well as the cost of living continuing to rise, councils are facing a national homelessness crisis. These pressures, combined with depleting social housing stock and an unaffordable private rented sector, are a perfect storm which is driving homelessness and disadvantage.
- We believe that everyone deserves a safe, decent, warm, and affordable place to live. The LGA is committed to improving housing conditions for all residents and has recently responded to the Government Consultation on Awaab’s Law, which will require landlords to investigate and fix reported health hazards within specified timeframes.
Background
Six-point plan for social housing
The LGA is calling for the Government to go further and faster in order for councils to be able to properly resume their historic role as a major builder of affordable homes by implementing a six-point plan for social housing.
- Roll-out five-year local housing deals to all areas of the country that want them by 2025 – combining funding from multiple national housing programmes into a single pot. This will provide the funding, flexibility, certainty and confidence to stimulate housing supply, and will remove national restrictions which stymie innovation and delivery.
- Government support to set up a new national council housebuilding delivery taskforce, bringing together a team of experts to provide additional capacity and improvement support for housing delivery teams within councils and their partners.
- Continued access to preferential borrowing rates through the Public Works Loans Board (PWLB), to support the delivery of social housing and local authorities borrowing for Housing Revenue Accounts.
- Further reform to Right to Buy which includes allowing councils to retain 100 per cent of receipts on a permanent basis; flexibility to combine Right to Buy receipts with other government grants; the ability to set the size of discounts locally; and the ability to recycle a greater proportion of receipts into building replacement homes paying off housing debt.
- Review and increase where needed the grant levels per home through the Affordable Homes Programme, as inflationary pressures have caused the cost of building new homes to rise, leaving councils needing grant funding to fund a larger proportion of a new build homes than before.
- Certainty on future rents, to enable councils to invest. Government must commit to a minimum 10-year rent deal for council landlords to allow a longer period of annual rent increases and long-term certainty.
Right to Buy
At a time of acute housing shortages, where 1.2 million people are on council housing waiting lists and councils are spending £1.74 billion annually on temporary accommodation, the right to buy can no longer be allowed to exist in its current form as it is culminating in the net loss of our much-needed social housing stock year on year. The LGA is calling for major reforms to the Right to Buy scheme by giving councils:
- Control over how and when monies raised through the scheme should be used on the development, delivery or acquisition of new homes.
- Power to protect a council’s financial investment in both existing and new social housing stock from a loss-making transaction.
- Flexibility for councils to shape the scheme locally so it works best for their local area, housing market and people.
The latest figures show that, for the last financial year, 10,896 homes were sold through RTB and only 3,447 have been replaced, resulting in a net loss of 7,449 social homes in 2022/23.
Whilst Right to Buy can and has delivered home ownership for many, the current form does not work for many of those in need of social housing who are unable to access secure and safe social housing or the local authorities seeking to support them.
The LGA said the main concern for councils is that rising discounts, alongside other measures that restrict councils use of Right to Buy receipts, mean that one household’s home ownership is increasingly being prioritised over another’s access to secure, safe, social housing.
The LGA welcomed the Government’s plans to increase the cap from 40 per cent to 50 per cent on the percentage of the cost of a replacement home that can be funded from Right to Buy receipts. However, the Spring Budget missed a key opportunity to allow councils to permanently retain 100 per cent of sales receipts. Increasing the cap will help to make some housing schemes viable that would not otherwise be, however, the LGA has argued that this cap should be removed entirely. The impact of the cap increase in supporting the delivery of replacement homes will also be limited. The two-year retention period announced in 2023 only covers the two financial years 2022/23 and 2023-24.
Budgetary asks
The vast majority of social housing lettings go to UK nationals and many councils already have policies relating to anti-social behaviour, criminal behaviour, rent arrears and income thresholds in their allocation policies. The LGA has raised concerns that restricting eligibility criteria for social housing and extending qualification periods could result in a rise in homelessness.
With 1.2 million households on council housing waiting lists and record numbers in temporary accommodation, this is symptomatic of our wider housing shortage. We called on the Government to use the Budget to grant councils the flexibilities needed to resume their historic role as a major builder of affordable homes.
Councils share the collective national ambition to tackle local housing challenges and create great places for current and future generations. Councils need a long-term national commitment to support a council house building renaissance and improvements in existing stock. Long-term certainty on powers and funding could help councils scale up to deliver an ambitious build programme of 100,000 high-quality, climate-friendly social homes a year. It would also improve the public finances by £24.5 billion over 30 years, including a reduction in the housing benefit bill and temporary accommodation costs. In Quarter 2 of 2023, provisional statistics showed that local authorities started 1,750 new dwellings, the highest rate since 1990.
Additional support from government would allow councils to scale-up further. An expansion of council housebuilding would provide a counter-cyclical boost to housing supply; offer a pathway out of expensive and insecure private renting towards home ownership; reduce homelessness; tackle housing waiting lists and support the growth of green skills and net zero supply chains.
Temporary accommodation
We are disappointed that the Budget provided no support to address the spiralling cost of temporary accommodation. Councils are spending more than £1.74 billion supporting 104,000 households in temporary accommodation, both the highest figures since records began. The restoration of Local Housing Allowance rates to the 30th percentile of market rents from April 2024, announced at Autumn Statement 2023, is a welcome step. However, it is disappointing that the Government has not taken the opportunity to uprate the subsidy for claims in respect of people living in temporary accommodation which remains capped at 90 per cent of January 2011 rates.
The severe shortage of social housing means councils are forced to pay to house people in private temporary accommodation, including hotels and B&Bs while they wait for a permanent home.
Building more genuinely affordable homes remains the best way to help families struggling to meet housing costs, provide homes to rent, reduce homelessness and tackle council housing waiting lists in the long term.
Family first culture
In 2022 Isos Partnership carried out a further study for the LGA considering structural change in children’s social care. This emphasised that in any change programme, leadership and vision are key. It will be important for the DfE to clearly articulate its vision for a “family first” culture, including through the National Framework, and to ensure that local leaders have the flexibility to translate this into a vision that makes sense in place. Communication, engagement and co-production are also important building blocks of culture.
These are lessons that should be considered by both central and local government in a holistic way; for example, DfE and children’s social care can work towards a family first culture, however this must also be supported by local and national approaches to issues such as housing and welfare that have a significant impact on families’ ability to parent.
Poor housing can lead to psychological distress, respiratory problems and impact on development. Local partners should come together to tackle the social determinants of children and young people’s mental health, including poverty and inequality, and consider the role of other local departments including housing, transport, sport and leisure services.
Contact
Elliot Gregory
Public Affairs and Campaigns Advisor
Phone: 020 7664 3059
Mobile: 07766252833
Email: [email protected]