A first real test for localism

One of the first tests of David Cameron’s localist credentials, should he be elected as the country’s next Prime Minister, could be to see whether he completes the legislative process Housing Minister John Healey has started by announcing the dismantling of the national housing revenue account system.

With a consultation paper due any day on the matter, the detail of the proposals that many have called for should become clear. However the Minister clearly stated his intention to equalize the existing £17b of overhanging debt across England’s 202 housing authorities in order to allow them to be self financing from that point onwards.

Due to the ongoing failure of the private sector housing market the Government’s aims of building 3m new homes by 2020 look further adrift than ever. Even when economic recovery commences affordability will remain a massive dilemma, unless we see a dramatic increase in supply. Council house waiting lists are sitting at 1.8m, a figure which almost matches the units lost by right to buy and demolition, which have never been replaced by wider social housing providers. With many more living in overcrowded conditions, local authorities are chomping at the bit to aid their communities; the only thing stopping them is the constraints placed upon them by the outdated housing finance system that currently exists.

Government has woken up to the huge public need for affordable housing with the initial £100m new build council housing announcement in the budget, quickly followed by an expansion of this pot to £400m in John Healey’s statement. However it is predicted that this funding will only support some 3,900 units in total. Whilst it is a drop in the ocean, it is at least a start and will see local authorities commence new build council housing for the first time in a generation.

In the late fifties and early sixties 245,000 council houses were being built on average in England per annum, last year it was no more than a few hundred. The LGA estimates that if the primary legislation required to dismantle the national housing revenue account is started by the current government and the process is completed by the next government, whoever that may be, then local housing authorities would be in a position to build an additional 139,000 council houses over the next decade.

Having shared a dinner table with Conservative Shadow Minister Bob Neill recently, I got the impression that this was an agenda the Conservatives were warming towards.