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Lib Dems call for abolition of debt caps Matthew Warburton - 27/09/2012

clegg qa 12

At their party conference this week, Liberal Democrats endorsed the policy paper 'Decent Homes for All'. Key proposals include:


  • Action to increase housebuilding to 300,000 homes a year, including giving more freedom to councils and housing associations.


  • Improved energy efficiency in all public housing by 2018.


  • More powers for councils to tackle empty homes.


  • Stronger powers for the Social Housing Regulator, including reintroduction of inspections.


  • Allow councils and housing associations to charge higher rents to better-off tenants.


The Lib Dems envisage a significant increase in new building by councils and housing associations, although no specific numbers are proposed. They argue, correctly, that housing construction has the potential to provide a major stimulus to the economy, with an estimated £2.84 in additional spending generated through the multiplier by each pound spent on construction.


And, also with justification, they point out that there is a strong invest-to-save case for investment in social housing, since the higher initial cost of subsidising new social homes will be repaid over time by a lower call on housing benefit compared with providing housing for the same tenant in the private rented sector.

In the case of local authority housing, the case for allowing additional investment is even stronger, since there need be no call on current government spending where the necessary subsidy can be provided from within the HRA.

The Lib-Dem paper pursues this argument to its logical conclusion, proposing the abolition of HRA debt caps and the reclassification of HRA borrowing to take it off the public sector balance sheet.

ARCH is supporting research led by the National Federation of ALMOs to develop a reasoned case for just these changes, which is likely to be published within the next month or so. It looks as though, as far as the Lib Dems are concerned, we are pushing at an open door.

The big - and obvious - question, however, is how much of this agenda has any chance of adoption by the Lib Dems' Coalition partners.

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