Ten Lib Dem council leaders call for borrowing powers to build council houses

Terraced housing
Ten Liberal Democrat council leaders, including the party’s local government spokesperson Watford Mayor Dorothy Thornhill, have written to the Guardian to call for the government to allow councils to borrow money to build council houses to deal with the “national emergency” in housing provision:

As Liberal Democrat council leaders we are outraged at the government’s short-sightedness in selling off council homes to pay for the right-to-buy extension to housing associations (PM warns councils over housing provision, 12 October). We have a vast shortage of affordable homes, which constitutes nothing short of a national emergency, and yet the government is seeking to make quick financial gains by disposing of properties that could provide much-needed homes for generations. Forcing right to buy on housing associations was the wrong policy before the election and it remains the wrong policy now. Shifting homes from one tenure to another without addressing our failure to build enough homes overall is like rearranging the deckchairs on a sinking ship.

Housing policy must be fair, and this policy is anything but. It is unfair to the 1.6 million people desperately waiting for homes, unable to get on with their lives. It is unfair for renters, whose rents will be pushed up as more families are squeezed into the private rented sector. And it is unfair for taxpayers who will be footing a higher housing benefit bill. Slashing the number of affordable homes in crucial areas is a nonsensical decision, and we urge the government to reconsider this sell-off.

If the government is serious about tackling this national emergency, they should listen to Lib Dem leader Tim Farron’s call for immediate action to allow councils to borrow funds to build. This would demonstrate a genuine commitment to building the homes that we desperately need.

The letter was signed by:

Dorothy Thornhill Elected mayor of Watford and Lib Dem local government spokesperson, Cllr Ruth Dombey Leader, London Borough of Sutton, Cllr Steve Jordan Leader, Cheltenham borough council, Cllr Paul Smith Leader, Colchester borough council, Dave Hodgson Elected Mayor of Bedford, Cllr Peter Thornton Leader, South Lakeland district council, Cllr David Tutt Leader, Eastbourne Borough Council, Cllr John Boyce Leader, Oadby & Wigston borough council, Cllr Sue Derbyshire Leader, Stockport metropolitan borough council, Cllr Ann Shaw, Leader, Three Rivers district council

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  • When I was local Councillor many years ago, when councils built council houses as a matter of course, we had a briefing from our Housing Officer who explained that as financial institutions consider councils very safe, they can borrow money for house building on a 60 year term at low interest rate, and can thus build far more cheaply than anyone else.

    This still seems a far better way to create housing people can afford to rent on secure tenancies than today’s complicated deals with developers, whose only interest is to minimise the amount of land they “lose” to affordable housing and Section 106 deals – and employ companies like this one to http://www.section-106.co.uk/ to help them avoid their liabilities.

  • The elephant in the room is “Right to Buy”….Build a house, allocate it to an existing council tenant and watch it disappear at a subsidised price…..
    RtB, for all ‘new builds’, needs to be addressed as a matter of urgency

  • Great idea – but why didn’t we make it happen in Government? Allowing borrowing headroom for councils could be kept off the national debt measures (as all liabilities would be local) but would be secure investments in themselves as well as helping with our (local) homelessness crisis.

    We spent 5 years in Government at great cost – and if we didn’t achieve this measure then, we haven’t a hope now. Why did we allow 2% limits on council tax without this measure? Why did we allow the right to buy to continue without this measure? We’ve missed the boat on securing measures like this – we had our time,

  • Well done and good luck.

    Be interesting to know how this squares with Osborne’s fiscal policy.

  • Shaun Cunningham 14th Oct '15 - 4:53pm

    How many times have we all heard “we need to build to provide affordable homes”

    The right to buy scheme is a disaster for those who are on a council housing waiting list, but even worst, many Council’s use the label affordable home to pass development proposals knowing full well residents seeking low cost / social housing will never see a front door key from the plans they endorse. The headline figure 45% affordable homes in many development briefs quickly becomes 30% then 20% or below. Many of these housing development schemes are a mere pipe dream.


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