Lift council cap on borrowing: LGA
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.