ARCH, together with the National Federation of ALMOs and the
Councils with ALMOs Group, has submitted a joint representation to
the Autumn Budget and Spending Review.
The submission argues for immediate steps to be included in the
Autumn Budget, due on 30 October, and longer-term measures to be
included in the Budget due next Spring.
For the Autumn Budget, the submission argues
for:
A long-term rent settlement, to include:
- CPI+1% rent increases for 10 years from 2025, and a convergence
mechanism to help local authorities start to recoup income lost
through rent cuts and caps.
- Long-term certainty on borrowing through a commitment to
stable, low PWLB rates to allow more borrowing for investment.
- A long-term commitment not to reintroduce HRA borrowing caps or
similar restrictions on HRA borrowing.
- Immediate action to tackle emerging HRA deficits as a result of
rent cuts and caps, through a cash injection or other means.
- An allocation of £1 billion for a fourth round of the Local
Authority Housing Fund in 2025/27, with a wider remit to tackle
homelessness and kickstart council housebuilding, pending the
development of a fit-for-purpose future funding model.
- An immediate review of current grant and subsidy rates for both
the LAHF and AHP to reflect the continuing increases in
construction industry costs.
- Immediate action to tackle claims harvesting in the social
rented sector, in advance of the implementation of Awaab's Law, to
protect tenants and prevent legal disrepair costs from spiralling
out of control.
- Recognition of the continuing impact of the cost-of-living
crisis on tenants living in local authority housing, and the
continuing high energy costs, with a commitment not to remove the
financial safety nets that many tenants will rely on through this
winter.
The Spending Review proposals are for:
- Development of a cross-tenure, national housing strategy that
provides a vision of where our nation's housing should be by
2050.
- A comprehensive, sustainable financial framework for the local
authority sector, which includes sustainable long-term rent
increases to support net growth; tackling the upfront investment
needed through grant funding and/or debt write-down; and subsidy to
develop a new generation of local authority homes.
- A review of rent-setting policy to put local authorities on a
sustainable financial footing while balancing affordability for
tenants. This includes:
- Introducing a convergence mechanism to bring rents back to
their 'real' level (i.e., to what they would have been without the
2016-2020 rent cuts and the 2023/24 rent cap).
- Recognition of the current difference between council and RP
rent levels and factoring this into longer-term rent setting.
- More flexibility locally within the Rent Standard where
councils can evidence need.
- Developing a rent mechanism so that local authorities can share
the cost-benefits of stock enhancement work, particularly energy
efficiency improvements, with current and future tenants.
- Providing adequate grant funding for council stock improvements
not included in the original self-financing settlement, including
fire and building safety work, energy efficiency and
decarbonisation of stock, and future enhancements to the Decent
Homes Standard.
- Action to launch a major new council building programme focused
on homes for social rent, coupled with a reformed, sustainable
Right to Buy scheme that gives every tenant fair access to the
opportunity of home ownership while guaranteeing one-for-one
replacement of every home sold as long as need continues.
- Expanding the size and widening the remit of the LAHF to
provide a flexible funding stream based on outcomes for households
rather than crude housebuilding numbers.
- Reforming the Affordable Homes Programme to focus more on the
provision of social housing and offering more flexible and
longer-term support for local authority building, including more
flexibility to enable funding of regeneration for homes that have
reached the end of their lifespan or where it would be uneconomic
to bring properties to net zero standards.
- Developing an industrial strategy focused on growing both the
size and quality of the construction industry, particularly small
and medium-sized contractors.
- Supporting an enhanced role for local authorities in regulating
and improving standards in the private rented sector, ensuring a
joined-up approach to homelessness, private sector regulation, and
decarbonisation.
- Tackling the cost-of-living crisis by moving away from
short-term funding pots and conducting a full review of the social
security system, so that people can afford to live.