ARCH, together with four other leading UK
housing organisations, is calling on the government to allow
councils to finance the building of 60,000 much needed new homes
over five years, adding 0.6 per cent to Britain's GDP.
In a report called 'Let's Get
Building' the organisations say there is 'a golden opportunity'
to help tackle the housing crisis and to stimulate the economy,
creating jobs, increasing the tax take for the Exchequer. The
report points out that there is a very strong case for economic
stimulus, with the construction sector's massive spare capacity
making it very well placed to respond.
In addition, it says that 92p out of every £1 spent on building
stays in the UK and that 56p of this returns to the Exchequer -
with 36p of that bringing direct savings in tax and benefits.
'There is consensus among politicians and business that we need
more housebuilding, so why can't we get building?' says the
Councils and arm's length management organisations (ALMOs) want to
help, but 'the stumbling block', says the report, 'is the centrally
imposed debt ceiling on councils, which prevents them from
releasing the capacity tied up in their housing stock.'
The report comes one year after government published its housing
strategy for England and argues that local authorities need to be
given more freedom to play a leading role in providing new
It has been published by the National Federation of ALMOs, and
produced in association with the Association of Retained Council
Housing (ARCH), the Chartered Institute of Housing (CIH), the Local
Government Association (LGA), and supported by the Councils with
ALMOs Group (CWAG).
The organisations which represent councils, housing professionals
and social housing organisations are calling on government to
unlock the potential of local authorities to build by removing a
borrowing cap which councils and the markets agree is
Let's Get Building urges the government to adopt internationally
recognised rules to measure government borrowing, which would
acknowledge that extra investment for council housing would not
count towards government borrowing levels because it is paid for
through future rent income.
Cllr Mike Jones, Chairman of the Local Government Association's
Environment Board, says:
"With house-building stalled and a lack of finance for
development, now is the time to lift the restrictions on local
government's ability to invest in housing to provide the homes we
so badly need and to release millions of pounds of economic
activity and jobs in construction.
"Councils have a proven track-record of responsible borrowing,
their credit rating is excellent and interest rates would be low.
We need the Treasury to free up councils to get local economies
growing and play their part fully to provide the new housing the
country desperately needs."