This time last year councils with housing were
surveyed on their investment plans for housing over the next five
years. ARCH, working with the Councils with ALMOs Group, the
National Federation of ALMOs, the LGA and HouseMark, wanted to
collect evidence to demonstrate how the 167 councils which still
own housing - managed directly or through ALMOs - were taking
advantage of the new freedom provided by self-financing to make
plans to renovate their existing stock, build new homes and come up
with innovative ways of meeting intractable housing problems.
The results were striking. Published as 'Innovation and Ambition:
the impact of self-financing on council
housing' the survey showed that councils were
planning to invest £15 billion over the next five years in their
existing stock - an average of £9000 per home.
Three-quarters of councils were planning to build new homes - in
many cases for the first time in twenty years - a total of
20-25,000 new homes over five years. And there was evidence to show
that councils could do much more if current arbitrary restrictions
on housing borrowing were lifted.
One year on, what has happened to councils' plans? The last survey
went out barely six months after the start of self-financing.
Although it showed clear evidence of plans for major investment, it
was also clear that many councils were still firming up their
detailed proposals, particularly for new homes, and were reluctant
to commit to an estimate of the number of dwellings that would be
built within a five year period.
A year on, it is likely that most, if not all, councils will have
firmer, perhaps more ambitious, plans - 25,000 could easily
underestimate the number of new homes now planned.
On the other hand, there have been significant developments over
the last year that might motivate councils to rein back investment.
Our recent survey of
council and ALMO rent arrears showed a sharp rise in rent
arrears over the first quarter of 2013/14, primarily because of a
big increase in arrears among tenants affected by the spare room
Councils will be factoring the continuing impact of this and other
welfare reforms into their income estimates. Last year's survey
showed that councils had already begun to increase provision in the
HRA for bad debts; many may now have further increased those
Councils have also needed to take account of the Government's
decision to change the guideline for rent increases from RPI plus
½% to CPI plus 1% from 2015. Many must also cost the impact of the
potential withdrawal of provision for rent convergence from 2015
For all these reasons, it seems likely that council plans have
changed since last year, creating a strong case for re-surveying
councils to get an updated picture. ARCH has worked with the LGA
and the Councils with ALMOs Group to prepare a much shorter survey
- there is no point repeating questions where not much is likely to
have changed since last year - which the LGA Research team sent out
to all councils with housing earlier this week.
We have asked for responses by 25 November in
order to publish a quick analysis of the results ahead of the
Chancellor's Autumn Statement on 4 December, and
also to allow the results to feed into responses by ARCH and the
LGA to the consultation on rents policy, which ends on Christmas
I would urge all readers - especially in ARCH member councils - to
make sure their council responds to the survey. The more councils
respond, the more reliable are the results and the more credible
they are in making our case to Government. Any queries about the
survey can be directed to me (email@example.com) or
Hilary Tanner at the LGA (Hilary.Tanner@local.gov.uk).
Matthew on Twitter