Innovation in council housebuilding: chapter five

This chapter focuses on the ‘what’ of council housebuilding – the scale, type and nature of provision.

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This project reinforces findings from other studies (such as Morphet and Clifford, 2017). There are six broad conclusions based on the online survey and case studies:

  • in some cases, there have been no new council homes built for more than three decades
  • each local authority is unique, and that is sometimes lost in aggregate figures in terms of the combination of scale, type and nature of development
  • council housebuilding provision changes over time because of internal and external factors including lessons from pilot schemes – local authorities are often on a journey and one-off surveys usually only give a static picture compared to in-depth case studies
  • ‘added value’ is important (for example local jobs and training) and helps make the case for council housebuilding
  • council housebuilding is one part of strategies to boost the provision of affordable rented housing (see chapter two). In some cases, sites are developed for a mix of tenures as well as different forms of social housing ( local housing companies (LHCs), housing associations and so on)
  • good quality provision attempts to redress the lack of investment in new homes in neighbourhoods, as well as tackling misconceptions and myths about the poor state of social housing.

The scale, type and nature of council housebuilding provision is not determined by the political control of local authorities, the status of the council or by region. This, again, illustrates the variation among councils. 

Scale of provision

The scale of new council housebuilding through the HRA over the last seven years is running at between 1,450 and 2,200 starts per annum, according to Ministry of Housing, Communities and Local Government (MHCLG) data.

Table three: local authority housebuilding starts and completions (based on MHCLG live table 253)

Year

Starts

Completions

2010/11

1,670

1,140

2011/12

1,450

1,960

2012/13

1,610

1,360

2013/14

2,200

910

2014/15

1,890

1,360

2015/16

1,490

1,900

2016/17

1,730

1,840

 

These figures do not include the purchase and acquisition of existing properties. Also, as has already been pointed out, there are difficulties and inconsistencies over council housebuilding data between reports. For example, some studies on local authority direct delivery include both council housing and LHC housing. There are, in addition, more specific reports available. The annual National Federation of ALMOs survey for 2017 showed that there was a 25 per cent increase in properties built and acquired by ALMOs compared with 2016 – 1,417 (with 900 new build units) compared with 1,136. It also highlighted that in 2018, ALMOs planned to develop or acquire at least 2,750 properties over the next few years.

At an individual council level, the online survey and case studies provided information on (i) the number of properties built since the self-financing settlement, (ii) completions in 2017/18 and (iii) estimated provision over the next five years. There is considerable variation irrespective of council status and size. For example, some large unitary urban authorities have had no completions in the last five years but have a programme for the next five years, and vice versa. This also illustrates the different trajectories for each council.

Completions between 2012/13 and 2016/17

Nearly a fifth of the councils in the online survey had built over 100 units over this five-year period. Approximately 10 per cent had built between 50-99 properties and half had built less than 50 units; 20 per cent had built no council properties.

Of the case studies, Birmingham City Council has the highest level of completions – 1,500 properties over five years. It is the major provider of affordable rented housing in the city. East Riding of Yorkshire Council had completed over 700 properties as the largest developer of affordable rented housing in its area and Stroud District Council had completed over 220 units. 

Completions in 2017/18

The variations are repeated for the latest financial year. Nearly one in 10 councils completed more than 100 units, with Birmingham City Council building approximately 200 properties and East Riding of Yorkshire Council completing just over 100 units. Over half of councils built no properties in 2017/18.

Estimated completions between 2018/19 and 2022/23

Both the case study councils and the online survey respondents emphasised the provisional nature of future programmes because of changing national policies. In some cases there was a degree of pessimism, but others responded positively because of, for example, the competitive bidding round in 2018 for individual increases in headroom borrowing. Some saw the early years of the rent cut as a hiatus and were resuming remodelled programmes. There was, thus, considerable variation. 

Over 30 per cent of online respondents estimated that their five-year programmes from 2018/19 would exceed 100 units, with Birmingham City Council having a programme of 1,500 units. Despite the caveats over future projects, it is noteworthy that the 30 per cent figure is significantly higher than the one-fifth of respondents with a 100-plus unit programme between 2012/13 and 2016/17. 

Patterns of completions – 2012/13 and 2022/23

As has already been noted, there are significant differences in the trajectory of individual council housebuilding programmes. The factors that determine the pattern of provision over the 11-year timescale include headroom borrowing capacity, site availability, skills and expertise, other forms of affordable rented provision (such as LHCs) and the uncertain external environment.

Councils can be grouped into four broad categories:   

consistent significant programme of over 25 units per year (20 per cent of respondents) growing programme (30 per cent of respondents) declining programme (20 per cent of respondents) limited/variable programme of less than 25 units per year (30 per cent of respondents).

Development sites

The main finding from the online survey is that both developments between 2012/13 and 2016/17 and proposed programmes from 2018/19 onwards focus on council-owned brownfield sites and/or infill sites (65-75 per cent of respondents). The three major drivers for this are (i) making effective use of local authority assets, (ii) fulfilling local and national planning policies on the supply of land for residential development and (iii) the unwillingness of other providers to consider such sites (especially small infill plots). A number of interviewees commented that ‘land has been a quick win’.   

However, as a number of the case studies illustrate, there are now fewer infill sites for future developments. This is resulting in councils considering other possibilities over the next five years including greenfield locations, estate regeneration and purchase and acquisition:

  • greenfield sites were mentioned by a fifth of councils for past programmes and two-fifths  for new programmes
  • estate regeneration rose from a quarter for past programmes to over half for new programmes
  • purchase and acquisition increased modestly from just over 40 per cent in past programmes to over half for forthcoming programmes
  • some rural case study authorities that had exhausted available council-owned land were turning the search for sites into a virtue, suggesting that land purchase could potentially enable better matching to geographical housing need.  

In addition, there is increasing interest in council housebuilding as part of larger mixed tenure schemes. The number of respondents in the online survey mentioning this approach for the future doubled compared to past programmes.

Furthermore, a number of case study local authorities pointed out that the type of infill and brownfield sites is changing away from, for instance, underused and derelict garage sites to former allotments, reuse of large gardens on low density council estates and school playing fields. These, of course, present additional challenges in terms of potential public opposition.   

Nature and type of provision

The online survey and especially the case studies revealed eight aspects of council housebuilding provision:

  • improving the quality of design, with a number of councils setting their own housing standards including the adoption of lifetime homes standards 
  • investigation and use of modular construction and modern methods of construction
  • growing emphasis on new provision as part of estate regeneration (for example Camden)
  • sustainability, such as energy efficiency
  • focus on both social rent and affordable rents, with the latter increasing in significance
  • added value that helps make the case for council housebuilding programmes 
  • inclusion of shared ownership by some authorities, such as East Riding of Yorkshire and Stroud.  

The first two of these were frequently cited as an initiative to encourage other public and private sector providers to ‘up their game’ on the quality of new housing supply. Councils are, thus, using their schemes as exemplars in housing development and construction. Stroud, for instance, has adopted its own ‘new build standard’.

Specialist provision, especially supported housing, does not feature strongly in either past or future programmes, with only 20-25 per cent of respondents to the online survey mentioning this type of scheme. Nevertheless, a number of examples of schemes targeted at older households were highlighted that address the challenges of under-occupation and the need to support downsizing through, for example, the provision of bungalow-type developments. Some authorities (including Stoke-on-Trent) were taking the opportunity to replace outdated and low-demand sheltered stock with modern housing, sometimes with care and support services for older people.        

Added value and the additional benefits of council housebuilding are highlighted in both the case studies and the online survey. The most significant of these are:

  • utilising under-used assets such as vacant sites (over four-fifths of survey respondents)
  • contributing to wider social objectives such as training (three-fifths of respondents)
  • improving collaboration with partners (approximately one-third of respondents).

On the second of these points, some case study authorities linked their housebuilding objectives to boosting the local economy and reducing economic and geographical polarisation. 

In relation to collaboration on the nature and type of provision, a large number of types of organisations were mentioned including arms-length management organisations (ALMOs), council-owned local housing companies, construction companies (small and large organisations) and housing associations. This is especially the case where there is a focus on larger mixed tenure projects that include social and affordable rent properties, shared ownership, build-to-rent and market ownership units. Community groups and parish councils play a role in helping to determine the mix of property types – size, tenure, types and so on.