In its response to the report of the House of Lords Select
Committee on the Built Environment published on 8 November, the
government appears to have ruled out any prospect of an increase in
Housing Revenue Account (HRA) borrowing caps ahead of the Autumn
Statement and Housing White Paper.
The House of Lords Select Committee had made a specific
recommendation to Government in their report saying: "In
recognition that housing need has rarely been met in England
without a significant direct contribution from councils, the
government should take steps to ensure that local authorities are
able to fulfil their potential as direct builders of new mixed
tenure housing. This should include reviewing the impact of
borrowing restrictions and proposed social rent
In its response to this recommendation, the government said it:
"does not accept the recommendation to review the impact of
borrowing restrictions on local authorities ability to deliver
housing" and goes on to say specifically "there are
no plans to remove these limits" and claims that the 166 local
authorities with a HRA had accumulated reserves of almost £2.5bn
and borrowing headroom approaching £3.4bn.
The government also says it "agrees with the underlying
thrust that local authorities have an important role in supporting
delivery of more housing" but that it supports the
proposals in the
House-Elphicke Review that councils "should move from being
statutory providers to being 'Housing Delivery Enablers"
working in partnership to drive housing delivery activity.
Their response also seems to rule out the possibility of any
across the board exemption from the four year 1% rent reductions
imposed under the Welfare Reform and Work Act 2016 saying that
"it does not accept that the social rent reductions may
threaten the viability of new council building schemes".
Read the government's full response (Chapters 169
"Despite encouraging noises emanating from the new government
under Theresa May that councils may be encouraged to have a more
direct role in the building of new social and affordable rented
homes, the government's response to the House of Lords Select
Committee's recommendation seems to suggest there will be little or
no change in policy on council house building from that under the
previous Cameron Government."
"We look forward to seeking clarity on the Government's policy
towards stock retained councils when we meet Housing Minister Gavin
Barwell on 21 November."