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Councils share housebuilding plans Matthew Warburton - 10/07/2014

Bricks300Over 50 representatives from councils and ALMOs across the East Midlands met in Derby yesterday to share experience on how best to boost the supply of new homes, including restoring housebuilding to its former status as "part of the day job" for councils.


All those present were working on plans to build either inside or outside the HRA, aiming to make good use of the borrowing capacity available to them since the introduction of self-financing two years ago. Several delegates strongly objected to stories published in Inside Housing that their councils had no plans to build despite large amounts of available headroom.


It was misleading, they said, to be represented as having no intention to build simply because spending approval had not yet been granted for a specific scheme. Some councils have more advanced plans than others; none had no plans to build at all.


There is general, and cross-party, support among councils for an expansion of housebuilding. This was the first message to emerge from the event for onward transmission to the Government and the CLG Review being led by Nathalie Elphick and Keith House.


There were several others. The amount of land suitable for housing development immediately available to councils varies widely. Most had been able to identify enough to get building programmes started but would soon need to be looking at significant land acquisition plans. A common complaint was difficulties in securing the release of public land owned by other bodies, such as county councils, health authorities or Network Rail, because of an insistence on disposal at full market value.


Much of the available land comes with issues that make development expensive, such as contamination, drainage or access problems. In some cases councils had targeted their efforts on 'difficult' sites to leave the easier ones available for private development and focus on those which would otherwise remain undeveloped.


This tends to push up unit costs, as does the policy adopted by some councils of aiming for developments that will enhance rather than just add to the villages or neighbourhoods in which they are built. Another message to the Elphick / House Review, therefore, relates to the way value for money in council housing schemes should be assessed. These policies may tend to push up unit costs compared with some private sector schemes, but in return for additional benefits external to the housing itself.


Presentations emphasized that gearing up to build after perhaps two decades involves a steep learning curve, and the reacquisition of lost capabilities, not just in the housing department, but across the whole council. Even those with several successful new developments under their belts did not feel they had reached the point where house building was once again established as part of the council's "day job".


But it is clear that councils and ALMOs represented felt themselves to be on the same journey - if at different stages - and could see benefits in sharing experience, if only to help others avoid repeating their mistakes. There would also seem to be opportunities where collaboration among councils, and with ALMOs and local housing associations, could bring real benefits.


Delegates also heard from two councils with experience of building through joint ventures with private developers (and in one case a housing association), where the council becomes a partner in the delivery of homes for sale as well as social rent.


It is clear that many councils were considering similar approaches, or the alternative of development outside the HRA through a wholly-owned company. Some had already established a company for this purpose; others were successfully undertaking off-HRA development through their ALMOs.


ARCH will be collecting more detailed feedback from participants and putting together with their help, and in collaboration with the NFA, a further submission to the House / Elphick review. Similar events in other regions are under consideration.


NB: this blog post includes details of ARCH's existing submission to the Elphick Review.

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