Give councils time and they’ll use headroom, says DCLG official

Yesterday, the government announced that just £60m of a £300m pot of additional borrowing capacity had been allocated to councils, following Inside Housing’s report showing £1bn of capacity remained untouched. 

Despite this, the Local Government Association again called for borrowing caps to be lifted entirely to help to meet a target of half a million homes to be built by the end of the decade. 

‘Councils have been arguing long and hard for increased borrowing capacity’

Graham Duncan, deputy director for affordable housing regulation and investment at the Department for Communities and Local Government

Graham Duncan, deputy director for affordable housing regulation and investment at the Department for Communities and Local Government, said: ‘Councils have been arguing long and hard for increased borrowing capacity. 

‘One question is how quickly are they going to be able to gear up. It takes time for a council to get in the place its ready to get serious about development.

‘Councils who got into it early are quite geared up, whereas other councils have only really woken up to this when we signed the deal on self-financing.’

Speaking at the National Housing Federation’s Housing Development conference in Coventry yesterday, he said the government expects to see council house building increase ‘considerably’ and encouraged those who do not have the ability to build themselves to partner with housing associations or house builders. 

Councils were allowed to retain the rent receipts from their housing stock in a financing deal agreed in 2012, but their borrowing powers were also capped under the agreement.

Earlier at the same event, Polly Toynbee, a columnist for the Guardian, said that with council house building so low, the right to buy policy should be suspended. 

‘It wouldn’t take too much bravery for an incoming government to say we are going to stop this for now,’ she said. ‘I don’t think there is any alternative.’