Councils must invest in housebuilding

There have only been two periods in the past 100 years when housebuilding supply kept up with demand: the inter-war years when horizontal growth out of city centres delivered our suburbs and in the late 1960s when vast public sector building programmes delivered nearly half of all new housing. Over the past couple of weeks our new government has been issuing a tantalising stream of hints and suggestions about what it might do to solve a problem that has defeated all other governments before it since the late 1970s. We are promised a housing white paper in late November with a range of interventions that refocus support on supply rather than demand.  Promisingly, housing minister Gavin Barwell has indicated support for a wide mix of tenures and we seem, finally, to be moving away from a government obsession with home ownership and support programmes for home-buyers that do little other than stoke the flames of price inflation and increase demand. For too long ideology, rather than practicality, has gotten in the way of affordable housebuilding. For a significant proportion of new housing to be delivered by local authorities means government relaxing the rules on borrowing. However sensible it might be thought to argue that investing in local authority housebuilding is to invest in society’s infrastructure and create construction jobs and training, adding borrowing to government balance sheets was never going to be an option while the Tories were the single-minded party of austerity. However, recent Treasury announcements abandoning the previous government’s austerity targets and suggesting a new programme of infrastructure investment, could easily include a new partnership with local authorities to revive public sector building, seeing housing as a vital part of our national infrastructure. This would be the simplest way for government to make a game-changing impact on supply, particularly when it is local authorities that hold such valuable land assets. But that does not remove responsibility from the private sector. There are some who argue that the private sector should be left alone to build what the market demands, that they should be appropriately taxed through section 106 and CIL, while providing below-market-rent homes of all tenures should be left to local authorities and housing associations. This, of course, ignores the issue that when private developers are responsible for delivering affordable homes as part of their schemes, those homes are delivered together, in mixed communities. Well, that’s the objective anyway. Communities secretary Sajid Javid said in his conference speech that the delivery of homes is not an economic issue, it’s a moral one. He’s right. The moral, and practical, imperative now is for government to relax the rules on local authority borrowing to build. This means not relaxing the responsibility on private developers to provide affordable homes as part of new mixed-tenure communities but recognising the reality of section 106 provision – that it was never going to build the quantum of affordable homes we need. Martyn Evans is chief executive of Uncommon