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Partner with housing associations to use borrowing freedoms, says LGA chair
The outgoing leader of the Local Government Association (LGA) has said councils should partner with housing associations to make the most of new borrowing freedoms to build more homes.
Lord Gary Porter, who stepped down as chair of the LGA this week after serving his four-year term, told Inside Housing there “is a serious issue” about councils having enough internal capacity and experienced staff to develop at scale.
The government scrapped the Housing Revenue Account (HRA) borrowing cap in October, following years of campaigning from councils – meaning local authorities’ ability to take on debt to invest in housing is no longer limited.
It hopes the move will see councils build around 10,000 homes a year, up from close to 3,300 in 2017/18.
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Scrapping borrowing cap ‘has already had intended effect’ for council development plans, says report“These housing associations have got capacity that’s underutilised,” said Lord Porter.
“So I think councils – if they’re clever – will look at doing more joint delivery with [housing associations] in their area and use the existing resource that’s already in the [housing associations].
“That way is good for the [housing association], because clearly they get more units built out by the same team.
“Wages will still be the same and we get access to people who are already good at doing that stuff.”
He suggested local authorities could bring in staff from housing associations temporarily to work on a development and then pay the association a profit share on the scheme or offer swap deals.
Referring to South Holland District Council, where he is leader, Lord Porter added: “My largest housing association has about 600 units in my patch. They might not necessarily be in the right place for them to manage them.
“So we might be able to do a new scheme jointly and they take the new scheme and I take some of their old units.”
Lord Porter also warned councils that it would be “insane” for them not to use the new borrowing freedoms, having “reluctantly” been granted them by the Treasury.
100 Years of Council Housing: we want to hear from you
To mark the 100th anniversary of the act receiving Royal Assent in July, we have a month of special activities planned, including interviews with senior council housing figures, exclusive debate and comment, and investigations into what local authorities, past and present, are doing to help provide housing.
This will signal the start of a stronger focus on local authority housing issues over the coming months on www.insidehousing.co.uk and in our weekly print and digital editions.
We want to hear from you about your local authority is doing to mark the Addison Act and about the housing issues in your area, email: editorial@insidehousing.co.uk
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