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20 largest local authority landlords call for new government to save council homes

Published on Wednesday, July 10, 2024

4 minute read

Aerial view of Leicester housing

LEICESTER City Council has joined with England’s other largest council landlords – including Southwark, Bristol, Sheffield, Leeds, Birmingham and Dudley – to jointly publish five solutions for the new government to ‘secure the future of England’s council housing.’

Back in March, directors from this cross-party group of 20 local authorities gathered at a summit to address an increasingly urgent financial crisis. Ahead of their full report release later this year, authored by Toby Lloyd and Rose Grayston, an interim release summarises their recommendations.

The report warns that England’s council housing system is broken and its future is in danger. An unsustainable financial model and erratic national policy changes have squeezed their budgets and sent costs soaring. New analysis from Savills shows that councils’ housing budgets will face a £2.2bn ‘black hole’ by 2028. 

Unless something is done soon, it reports that most council landlords will struggle to maintain their existing homes adequately or meet the huge new demands to improve them, let alone build new homes for social rent. Across the country development projects are being cancelled and delayed, with huge implications for the local construction sector, jobs and housing market.

Rather than increasing supply, the reality is that some councils will have no option but to sell more of their existing stock to finance investment in an ever-shrinking portfolio of council homes.

Their recommendations include urgent action to restore lost income and unlock local authority capacity to work with the new government to deliver its promises for new, affordable homes throughout the country.

The five solutions set out detailed and practical recommendations to the new government:

  1. A new fair and sustainable HRA model – including an urgent £644 million one-off rescue injection, and long-term, certain rent and debt agreements.
  2. Reforms to unsustainable Right to Buy policies
  3. Removing red tape on existing funding
  4. A new, long-term Green & Decent Homes Programme
  5. Urgent action to restart stalled building projects, avoiding the loss of construction sector capacity and a market downturn

They make up a plan for a ‘decade of renewal’, with local authorities and central government working together to get ‘Housing Revenue Accounts’ (HRAs) back on stable foundations, bring all homes up to modern and green standards, and deliver the next generation of council homes.

Deputy city mayor and executive lead on housing in Leicester Cllr Elly Cutkelvin said: “In Leicester, we have already taken the unprecedented step of declaring a housing crisis recognising the growing and desperate need for affordable, decent housing.

“As one of the largest council landlords – with almost 20,0000 homes on our books – we are acutely aware of the vital need for stability and an urgent review of the way council housing is funded so we can invest in future proofing our existing housing stock and building more affordable homes.

“The loss of council homes through Right to Buy, the cost of maintaining ageing housing stock, restrictive debt and rent agreements and an increasingly unstable and unsustainable funding model means that councils are unable to meet the growing need for affordable homes, plunging many more people further into financial crisis.

“This joint report is an important reminder of the value of council homes and the crisis that councils face as landlords. It is also a call for the new government to help secure the future of our council homes for generations.”

Southwark Council invited all local authorities with around 19,000 council homes or more to jointly produce a report to be published in September. These council landlords have come together in response to their urgent financial challenges and to set out the national policy changes needed to secure their future.

Councillor Kieron Williams, Leader of Southwark Council, said: “Our country’s largest council landlords have come together because we see every day how council homes transform lives for the better.  For families across our country their council home is a foundation - giving them the security needed to put down roots, flourish in childhood, get on at work, stay healthy and age well.

However, erratic policy choices from our last government have left council housing finances completely broken and the system’s future is in danger. Councils are being forced to cancel new build developments, and even sell off council homes, to focus on keeping their existing residents safe.

We are releasing this interim report now, from England’s largest council landlords, because we want to work with the new government from day one to deliver the more and better council homes that our communities need. With a growing number of council landlords on the brink, urgent action is needed to put our national council housing finances back on firm foundations. Our five solutions set out how we can work together to achieve this.”

The 20 local authority landlords jointly publishing this report are:

  1. Southwark Council
  2. Birmingham City Council
  3. Bristol City Council
  4. Camden Council
  5. Dudley Metropolitan Borough Council
  6. Royal Borough of Greenwich
  7. Hull City Council
  8. Islington Council
  9. Hackney Council
  10. Kirklees Metropolitan Borough Council
  11. Lambeth Council
  12. Lewisham Council
  13. City of Wolverhampton Council
  14. Nottingham City Council
  15. Leicester City Council
  16. Newcastle City Council
  17. Rotherham Metropolitan Borough Council
  18. Leeds City Council
  19. Sandwell Council
  20. Sheffield City Council