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Government respond to Lords Report “Building More Homes” 21/12/2016

The House of Lords Economic Affairs Committee has criticised the government's response to its report, "Building More Homes", which was published in July. 


In its response, the government gave no indication of a relaxation of Housing Revenue Account (HRA) debt caps to build more social housing but signaled its support for councils building more homes for market rent or sale through Local Housing Companies.


The Committee's report criticised the government's target of one million new homes by 2020 as inadequate and said that the level of house building required to meet the housing crisis could not be met by the private sector alone.


The Committee had called on the government to enable councils to borrow to build social housing as they can for other purposes.


The government published their response to the Committee's report in December 2016. In it, they accepted much of the Committee's analysis of the reasons for the crisis in the housing market but said it will produce a 'comprehensive package of reform' to increase housing supply in a White Paper to be published 'in due course'.


In response to the Committee's specific recommendation that the government should ensure local authorities who wish to build social housing have access to the funds to do so, the government gave no indication of any relaxation of HRA debt caps to enable the building of more social rent housing, pointing out that in the Autumn Statement 2013, £300million of additional borrowing was made available to councils in England and only £127.2million was taken up by 20 councils in 2014/15.


However, the government did signal their support for councils developing new and innovative ways to build more homes for market rent or sale - particularly through Local Housing Companies stating in its response: "We have been clear that we support authorities using companies to deliver market housing for sale or rent and they have matched our ambition to release additional land with capacity for at least 160,000 homes."


Commenting on the government's response, Lord Hollick, Chairman of the House of Lords Economic Affairs Committee said:


"This is a welcome albeit timid response to the Committee's recommendations. The measures proposed are inadequate in the context of the crisis in the housing market. I hope that the promised White Paper will set out the far reaching measures needed to address the problems in the housing market and to meet the Prime Minister's ambitions.

"The Government have accepted the Committee's analysis of the problem, but shied away from the steps needed to address it. In particular, the Government continue to rely on the private sector to build more houses when, as the Committee heard, these builders are incentivised to maximise profit margins not increase the number of houses they build. The Government have failed to recognise the need for local authorities to build more homes and for them to be freed from unnecessary and arbitrary financial restrictions which severely curtail their ability to build.

"We are also disappointed that the Government has ignored our suggestion to give a single Cabinet Minister responsibility for ensuring suitable unused public land is made available for developing homes. Without a champion for that work at the highest level in government there is a danger that an opportunity to bring those spaces into productive use will be lost."

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  • Bryan Tully, Crawley BC - 22 December 2016

    Is this another attempt my central Government not to give local authorities money to build new council houses but to give money to Housing Associations? Is this the end of social housing? Central Government want to sell houses through local housing companies.Does this mean Housing Associations?