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Morning Briefing: all the reaction to May’s plan to scrap the borrowing cap
Theresa May’s announcement yesterday about scrapping the council borrowing cap received plenty of attention from the media, with The Express going as far as calling her speech “triumphant”.
In the news
Commentators from across the political spectrum have welcomed the prime minister’s plan to scrap the borrowing cap, in what was broadly thought to be a successful conference speech. This glowing report in The Express is one of the most effusive.
Jonn Elledge, the editor of CityMetric, has this interesting take on the announcement. He suggests that removing the cap will allow countercyclical building, which in turn will make the market more resilient.
Huff Post digs into what the announcement might mean for people who want to buy their own homes.
Meanwhile, the BBC has this piece explaining what the cap is and why it’s important, and economics editor Kamal Ahmed has written about why the prime minister’s speech yesterday may have made Philip Hammond’s Budget next month a bit trickier.
On a slightly different note, property advisor JLL has this interesting piece on whether new finance options are enough to coax smaller companies into the housebuilding market.
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Citizens Advice has been forced to defend its involvement in the implementation of Universal Credit after receiving criticism from campaigners, Third Force News reports.
The advice service has received £39m from the Department for Work and Pensions to deliver a support service for benefit claimants, even though it previously called for the introduction of the system to be halted.
Council tenants whose children are caught carrying knives could lose their homes under new plans from Nottingham City Council to crack down on crime, the Derby Telegraph reports.
Craig Guildford, chief constable for Nottinghamshire Police, said police cannot “arrest their way out” of Nottingham’s knife crime problem, and the threat of eviction from Nottingham City Homes properties would act as “a series deterrent”.
In Wales, a decision to reject plans to redevelop a former college campus has been met with “disappointment” by the University of South Wales, which wanted to build more than 300 homes on the site. The South Wales Argus has the full story.
Scottish Land & Estates has said that agricultural landlords will work constructively with the Scottish Government and others to improve housing stock on tenanted farms after concerns were raised about its quality. The good news for rural communities is on Scottish Housing News.
Two unions have served notice for industrial action on Glasgow City Council in a dispute over equal pay, the BBC reports. The strikes are likely to affect home care, schools and nurseries, and cleaning and catering services across the city.
The transfer of Antonine Housing Association’s operations to Caledonia Housing Association is now complete, having been signed off by the Financial Conduct Authority, Scottish Housing News reports.
Lastly, Reuters has this interesting piece about why houses are not like pigs (it’s about economics).
On social media
There was lots of tweeting going on during Theresa May’s speech yesterday as councils and housing professionals welcomed the news that the borrowing cap would be lifted:
Positive news from @theresa_may on the council housing borrowing cap - long overdue. We can’t fix things overnight, but councils building again at scale will make a massive difference.
— Peter John (@peterjohn6)Positive news from @theresa_may on the council housing borrowing cap - long overdue. We can’t fix things overnight, but councils building again at scale will make a massive difference.
— Peter John (@peterjohn6) October 3, 2018
LGA WIN! Fantastic news as @theresa_may announces the housing borrowing cap will be scrapped. The LGA has lobbied tirelessly for this move to allow councils to resume their historic role as a major builder of affordable homes.
— LGANews (@LGANews)
Full reaction from us to come 🏠🏡🏘 #ukhousingLGA WIN! Fantastic news as @theresa_may announces the housing borrowing cap will be scrapped. The LGA has lobbied tirelessly for this move to allow councils to resume their historic role as a major builder of affordable homes.
— LGANews (@LGANews) October 3, 2018
Full reaction from us to come \uD83C\uDFE0\uD83C\uDFE1\uD83C\uDFD8 #ukhousing
Tom Copley, the housing spokesperson for London’s City Hall, gave some indication of what difference the change could make to local authorities:
By pure coincidence I have a question down for tonight’s @LewishamCouncil meeting asking how many new council homes could be built if the HRA borrowing cap were lifted. Based on 2012 data it would free up additional capacity to deliver an extra 1,460 new homes in the borough pic.twitter.com/mrYWyA0Ziy
— Tom Copley (@tomcopley)By pure coincidence I have a question down for tonight’s @LewishamCouncil meeting asking how many new council homes could be built if the HRA borrowing cap were lifted. Based on 2012 data it would free up additional capacity to deliver an extra 1,460 new homes in the borough pic.twitter.com/mrYWyA0Ziy
— Tom Copley (@tomcopley) October 3, 2018
But one Grant Shapps was quick to pour cold water on the plans:
Well constructed, written & delivered @theresa_may speech today. Last yr was leadership change window, but now PM needs to complete #Brexit deal. Btw, anyone who doubts ’end to austerity’ pledge, should note Council House build borrowing cap removal could well increase deficit
— Grant Shapps MP (@grantshapps)Well constructed, written & delivered @theresa_may speech today. Last yr was leadership change window, but now PM needs to complete #Brexit deal. Btw, anyone who doubts 'end to austerity' pledge, should note Council House build borrowing cap removal could well increase deficit
— Grant Shapps MP (@grantshapps) October 3, 2018
What’s on
The Grenfell Inquiry continues, with more evidence from survivors
More on the HRA cap announcement
Government now appears to recognise the role of councils - but it needs to scrap Right to Buy Terrie Alafat finds much to like in Theresa May’s council borrowing cap announcement, but wants the government to go much further
New council house borrowing will be under prudential rules, says Porter More details of how new council borrowing rules are likely to work, from the chair of the Local Government Association
More details to come in Budget on borrowing cap The government has been unable to provide any further detail on its plans to scrap the borrowing cap, saying more information will follow in the Budget later this month.
The HRA borrowing cap explained A useful explainer of the context to the council borrowing cap along with a timeline of the story so far
Councils say scrapping debt cap will boost house building More reaction from local authorities
Scrapping HRA cap ‘could see 100,000 homes built’ Details of estimates from Savills on the potential impact of the government’s decision
May’s HRA announcement deserves its warm welcome – but the Budget will be the real test Blogger Jules Birch picks over the announcement
Sector heralds lifting of the borrowing cap as excellent news Reaction to the HRA cap axe from across the social housing sector
Government expects annual £1bn of council borrowing once debt cap is scrapped The first indication of the amount of borrowing ministers are expecting once the cap is no more
Theresa May announces plan to scrap council borrowing cap All the details of Theresa May’s surprise announcement
May's Conservative Party conference speech: the housing bits in full
Below is the text of the housing section of Theresa May's party conference speech:
"Last year I made it my personal mission to fix another broken market: housing.
We cannot make the case for capitalism if ordinary working people have no chance of owning capital.
To put the dream of home ownership back within their reach, we scrapped stamp duty for most first-time buyers – and over 120,000 households have already benefited.
We’ve helped half a million people onto the housing ladder through other schemes like Help to Buy.
And this week we have announced that we will charge a higher rate of stamp duty on those buying homes who do not live and pay taxes in the UK, to help level the playing field for British buyers.
The money raised will go towards tackling the scourge of rough sleeping.
But the truth is that while these measures will help in the short term, we will only fix this broken market by building more homes.
And that is what we are doing.
More new homes were added to our stock last year than in all but one of the last 30 years.
But we need to do better still.
The last time Britain was building enough homes – half a century ago – local councils made a big contribution.
We’ve opened-up the £9 billion Affordable Housing Programme to councils, to get them building again.
And at last year’s conference I announced an additional £2 billion for affordable housing.
But something is still holding many of them back.
There is a government cap on how much they can borrow against their Housing Revenue Account assets to fund new developments.
Solving the housing crisis is the biggest domestic policy challenge of our generation.
It doesn’t make sense to stop councils from playing their part in solving it.
So today I can announce that we are scrapping that cap.
We will help you get on the housing ladder.
And we will build the homes this country needs."
Speech given to the Conservative Party conference on 3 October, 2018.
