The coalition helped bury an enduring and dangerous myth in a major report into the country’s chronic housing crisis released this week. The year-long probe rubbishes the idea councils are stopped from building new homes by Treasury ‘caps’ on their borrowing powers.
As research published on Coffee House revealed last year, the idea caps hold them back is a distracting myth, perpetuated by special interest groups and parroted by columnists like the Guardian’s Owen Jones.
All this bellyaching about borrowing ‘restrictions’ continues, led largely by Tom Copley, Labour’s housing spokesperson in City Hall and the Labour-led Local Government Association.
The real barriers to town halls getting their oars back into house building is lack of development nous and a ‘can’t-do’ affliction, brought on by funding cuts. Here is what Keith House, the Liberal Democrat leader of Eastleigh Council and joint author of the report said at the launch:
‘I have been regularly briefed by the Local Government Association that the issue is a shortage of money. A lot of people think wrongly that it is about the borrowing cap. I am now convinced that this isn’t the issue.’
House admits councils are down in the dumps from government cuts. ‘They feel financially constrained and feel it is difficult to do things,’ he said.
Part of the solution, the report says, is to refashion the way town halls interact with housing builders, large and small. Their most senior officers and leaders must take charge of sorting out their affordability crisis, using their contacts in investment and private industry. This role has even been given the kind of clunky title, favoured by official reports: ‘The Housing Delivery Enabler’.
This is a subtle but shrewd and practical move. If you want to get things done in town halls you need the two most senior people in the room. The authors found some councils held hundreds of meetings to get a single business deal agreed.
Such bureaucracy is hugely off-putting for investors keen to pour cash into housing projects, according to Natalie Elphicke, the housing finance lawyer who co-authored the report.
‘We have had reports of 300 to 400 meetings where people were trying to make do business to just get one deal done,’ she told the launch event. ‘Investors will decide to pursue other opportunities.. and other things to invest in.’
This practical and ‘localist’ approach to easing affordability was strongly endorsed by the chief secretary to the Treasury who dropped into the launch. ‘As someone who believes in the devolution of power, local authorities are closest to their residents and know their needs,’ Danny Alexander said.
None of the report’s recommendations will ignite a sudden acceleration in house building on their own. And some of its bolder ideas look doomed for the dustbin. Its idea to create an independent ‘Housing and Finance Institute’ received a rather lukewarm reception from ministers. Not surprising, perhaps, given their allergy to yet-another agency.
But taken together the subtler, practical prompts in the Elphicke-House could just unstick the local government machine, worn down as it is by funding cuts. Just griping about borrowing caps is of no use to anyone when there’s investment aplenty available.
What’s needed is a bit more guts, gumption. And for local authority to look beyond their own four walls for the resources and wherewhithal to get house building going.
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