Lift coun­cil cap on bor­row­ing: LGA

The Daily Telegraph - Business - - Front Page - By Is­abelle Fraser

THE chair­man of the Lo­cal Gov­ern­ment As­so­ci­a­tion has urged the Trea­sury to lift the cap on coun­cil bor­row­ing in next week’s Bud­get, say­ing: “Coun­cils need to be able to build again if the Gov­ern­ment is se­ri­ous about tack­ling the hous­ing cri­sis.”

Lord Porter, a Con­ser­va­tive peer and also a for­mer builder, has writ­ten to the Chan­cel­lor urg­ing him to let coun­cils bor­row to build new af­ford­able homes.

The cap on the amount lo­cal au­thor­i­ties can bor­row un­der the Hous­ing Rev­enue Ac­count has been in place since 2013. It means that coun­cils are able to bor­row against as­sets for fa­cil­i­ties such as swim­ming pools but not hous­ing. A change to this rule would not cost any­thing.

Dur­ing the Con­ser­va­tive party con­fer­ence, Prime Min­is­ter Theresa May pledged a “re­birth of coun­cil hous­ing”, with a £2bn fund. Lord Porter said: “We’re ready to step up. Now we need to be given the free­dom to be able to.”

Ex­perts put de­mand at around 300,000 houses a year. The last time more than 250,000 prop­er­ties were built in Eng­land was in 1978, when coun­cils built 44pc of new homes. In 2016-17, just 1,840 homes were built by lo­cal au­thor­i­ties in Eng­land.

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