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A message from councils to central government: give us the tools to build the homes our country needs
Local government shares Westminster’s commitment to build more homes, but needs to be empowered to do so, writes Adam Hug, housing spokesperson for the Local Government Association, as part of the #PlanForHousing campaign
Cllr Adam Hug is housing spokesperson for the Local Government Association
Housing, or the lack of it, is one of the biggest issues facing councils up and down the country. Housebuilding has failed to keep pace with the rising population, particularly when it comes to affordable and social homes. Government data shows that the proportion of housing for affordable or social rent in England has fallen from around 20% in 2000 to 16% in 2023.
Despite various government schemes over the years, increasing the supply is challenging, with providers citing issues including access to funding and increasing construction and land costs as barriers to delivery.
The shortage of affordable housing is a key driver of homelessness, which has been exacerbated by the ongoing cost of living crisis as those on lower incomes are unable to keep up with rising bills and housing costs. The latest government figures show that homelessness rates have increased by more than 10% in the past year, with 358,370 households seeking support from their local authority in 2023-24.
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This is putting extraordinary pressure on the budgets of councils, which are now spending vast sums of money – £1.75bn collectively – housing people in temporary accommodation due to a lack of social and affordable housing.
What’s clear is that we are beyond crisis point and we are urging the government to take bold action to tackle the housing crisis. Since taking office in July, the government has started to set out its plan to get Britain building and has signalled its intent to enable a council housebuilding revolution. Councils share the government’s commitment to build more homes, but need to be empowered with the right tools, powers, resourcing and funding to do so.
In our Local Government White Paper and National Planning Policy Framework consultation response, we set out some short-term and longer-term measures that would help councils boost the supply of housing and provide sustainable funding for those in need.
“We need a commitment to uprate LHA rates to the 30th percentile of local rents beyond 2025-26”
As building houses takes time, we need some short-term measures that can be brought in immediately to help alleviate the pressure being put on councils’ budgets by housing and temporary accommodation pressures. This would include an immediate increase in the subsidy for temporary accommodation, so that it is no longer frozen at 90% of 2011 Local Housing Allowance (LHA) rates.
Over the past five years, frozen LHA rates have left councils to pick up more than £700m in costs that they are unable to claim back from government.
Coupled with this, we need a commitment to uprate LHA rates to the 30th percentile of local rents beyond 2025-26. These measures would enable councils to invest the money being spent on costly temporary accommodation back into replenishing their own housing stock and homelessness prevention services.
We would also like to see the government go even further with its reforms of the Right to Buy scheme to truly stem the annual net loss of social homes and to allow councils to use their receipts to deliver replacement homes.
We would urge the government to allow councils permanent flexibility to combine receipts with other government grants; the ability to set the size of discounts locally; and to exempt new build homes.
In the medium term, we would like to see the roll-out of five-year local housing deals to all areas of the country that want them. Our research suggests that this would lead to 200,000 additional social homes being built over the span of 30 years, delivering a steady stream of new social housing to councils that desperately need it.
We need to see strengthened Housing Revenue Accounts via a long-term rent settlement and restoration of lost revenue due to rent caps/cuts, to give councils certainty on rental income and support long-term business planning.
“Ultimately, we would like to see the government take a longer-term approach to housing that would focus on sustained housebuilding and bring back a focus on preventative services, which includes homelessness and supported housing”
The future of council housing finances hangs in the balance owing to the cumulative impact of historic and proposed government policies and regulatory burdens, as well as recent turbulence in the economy and markets – with high inflation and interest rates – which when combined are forcing councils to make trade-offs such as reducing their new housebuilding programme.
Ultimately, we would like to see the government take a longer-term approach to housing that would focus on sustained housebuilding and bring back a focus on preventative services, which includes homelessness and supported housing.
Previous analysis has suggested that investing £1.6bn in supported housing would create savings of more than £3.4bn. Various pots of piecemeal funding for supported housing improvement and commissioning are coming to an end, so we are asking the government to consider how it funds housing-related support for the future in a way that is flexible and sustainable and encourages long-term and strategic commissioning.
Our message to government is simple: work with us and give us the tools to build the homes our country needs.
Adam Hug, housing spokesperson, Local Government Association
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