House-Elphicke review 'hamstrung by terms of reference'

A report by Keith House, leader of Eastleigh Borough Council and Natalie Elphicke, chair of charity Million Homes, recommended that councils should take a much more prominent role in their area’s housing strategy.

Under its terms of reference, the Treasury-commissioned report was unable to recommend the lifting of debt caps but the authors said they did not believe the move necessary at the launch on Tuesday.

However, Gavin Smart, deputy chief executive of the CIH, said he ‘disagreed’ with this view, and called the cap on borrowing ‘the elephant in the room’.

‘In some ways the review was hamstrung by its terms of reference, which specifically excluded the issue of increasing council borrowing caps – but that is exactly the type of game changer we need,’ he said.

Mr Smart also said the report should have challenged the issue of affordability, adding that additional homes built by councils must be ‘available for people on all levels of income’.

The Local Government Association (LGA) echoed this concern, saying councils ‘still need’ increased borrowing power to build new homes.

The report noted that the government could consider borrowing flexibilities to deliver one-for-one replacements for right to buy ‘within its current overall spending plans’, but went no further on debt caps.

Matthew Warburton, policy adviser for the Association of Retained Council Housing (ARCH), said the report was ‘pushing at open doors’, with many of its ideas already being enacted by ARCH members.

‘The suggestion that councils become Housing Delivery Enablers is a new name, but it’s not significantly different from what councils have been encouraged to do for the last 20 years,’ he said.

‘I think the value of the report is that it provides quite a lot of detailed suggestions and practical steps that councils could take.’

However, he questioned how councils would manage to take on an expanded role with their general funds under ‘extreme pressure’ from government cuts.

The report also suggested councils should be reminded of their power to build homes of all tenures outside the housing revenue account (HRA), as a means of generating cross subsidy and meeting housing need.

Rob Beiley, a partner at Trowers & Hamlins solicitors, added: ‘The report confirms our belief that housing can represent an investment for local authorities as well as delivering public value.’

Chris King, managing director at developer Kier Living, welcomed the proposal for greater private sector partnerships, and said private developers could play a key role in advising on private elements of mixed tenure schemes.