The anticipated Housing White Paper was launched earlier this
week on 7 February by Communities Secretary Sajid Javid. In it, the
government says it's "Backing Local Authorities to Build". What is
this likely to mean for stock retained councils and their
The long awaited Housing White Paper 'Fixing our broken housing
market' acknowledges what most housing professionals and
others working in local government have known for some time - that
the housing market does not work for ordinary working people.
The White Paper sets out some startling
- Since the 1970's there have been on average 160,000 new homes
provided in England each year. The consensus is that we need
between 225,000 to 275,000 or more homes per year to keep up with
- More than 2.2million working households with below average
incomes spend a third or more of their disposable income on housing
- In the private rented sector the mean rent payment as a
percentage of weekly household income is over 50%.
- In 2015 the average home in the South East of England increased
in value by £29,000 while the average annual pay in the region was
- In the 1990's a first time buyer couple on low to middle income
saving 5% of their wages each month would have enough for an
average size deposit after just 3 years. Today it would take the
same couple 24 years to save for an average size deposit.
The White Paper sets out a list of proposals under four
main chapters to tackle the problem:
- Planning for the right homes in the right places
- Building homes faster
- Diversifying the market
- Helping people now
Many of the measures under Chapters 1 and 2 focus on planning
measures to speed up the delivery of new homes across all tenures,
and alongside the White Paper, the government has issued formal
consultation on a range of specific planning proposals. Many of
these proposals involve yet further amendments to the National
Planning Policy Framework and the government intend to publish a
revised Framework later this year.
Among the proposals in Chapter 2 is a proposal to increase
nationally set planning fees. Councils will be able to increase
fees by 20% from July 2017 if they commit to invest the additional
fee income in their planning departments. The government is minded
to allow an increase of a further 20% in certain circumstances
where local authorities are meeting housing targets and will be
consulting further on the detail.
The government is not intending consulting on proposals under
Chapters 3 and 4 other than a separate consultation on the "Build
to Rent" proposals in Chapter 3.
The White Paper confirms the recent shift in housing
policy away from almost a sole focus on home ownership towards a
more mixed tenure approach and states that:
"This summer, the Homes and Communities Agency will be
relaunched as Homes England with a clear purpose: 'To make a home
within reach for everyone'. At the heart of this renewed purpose
will be the ambition to get more homes for communities across all
housing tenures, put in infrastructure to unlock housing capacity
and attract small builders and new players to diversify the market
on a sustainable basis."
In line with this policy shift to a more mixed tenure approach,
and encouragingly for the first time since the 2012 self-financing
settlement, there a recognition from the Government that local
authorities have an important role in delivering new homes and the
White Paper claims that the Government is "Backing local
authorities to build".
Despite the long wait for such backing, the proposals in the
White Paper do not go as far as ARCH and the NFA might have liked
in terms of addressing the issues preventing councils and ALMOs
building more new homes - for example there is no mention of repeal
of the high value asset levy to be charged to council's Housing
Revenue Accounts after April 2018 and no repeal of the four year 1%
rent reductions imposed under the Welfare Reform and Work Act.
Neither is there any mention in the White Paper of the impact of
recent welfare reform changes on the ability of tenants to pay for
affordable housing across both the social and private rented
sector; or the impact of the roll out of Universal Credit on
tenants' rent arrears and the risks posed to landlords to their
income stream as highlighted in the recent
ARCH/NFA Welfare Reform Survey.
The White Paper promises to set out, "in due course", a new Rent
Policy for social housing landlords (both housing associations and
local authority landlords) for the period beyond 2020 and promises
further discussion with the sector before doing so.
The Government say their aim:
"Is to ensure that they have the confidence they need about
their future income in order to plan ahead."
This statement is to be welcomed, providing that by the word
"they", the government means they intend to ensure that both
housing associations and local authorities have certainty over
future rental income and ARCH will be pressing for the
re-introduction of a ten year rent policy from 2020.
In "backing local authorities to build" the White Paper
"Local authorities' role in delivering new housing goes
beyond using their planning powers. They also have an important
role in delivering homes themselves. We want to make sure that they
have the tools they need to get homes built where the market isn't
coming forward with enough."
On Local Housing Companies and/or joint venture models building
mixed tenure sites which include new market housing for sale and
private rent as well as affordable housing, the White Paper says
that the government:
"Welcome innovations like these and want more local
authorities to get building. To that end(the government)will seek
to address the issues that hold them back"
However the White Paper strikes a note of caution which may give
rise to concerns about the viability of Local Housing Company
Business Plans amongst councils who have, or are considering,
setting up Local Housing Companies saying:
"We(the government)want to see tenants that local
authorities, place in new affordable properties offered equivalent
terms to those in council housing, including a right to buy their
The White Paper reinforces the
opening up of funding to local authorities under the
Accelerated Construction Programme and the offer of tailored
support packages to councils who want to build on their own land at
pace with priority given to innovative delivery models.
The Housing White Paper acknowledges the long tradition of
council housebuilding and acknowledges that council
"Continues to provide a small, but important and growing
source of new homes. Twice as many council homes were built in
England in the last 5 years than were built from 1997 to
However, the White Paper makes no mention of the hugely
significant role that the introduction of the Housing Revenue
Account self-financing model has played in the increased provision
of council housing in this period. Nor does it commit to review the
proposed introduction of the high value asset levy or the overall
national Housing Revenue Account debt cap. The White Paper does
commit the government to:
"Work with local authorities to understand all the options
for increasing the supply of affordable housing"
It goes on to say that:
"Housing markets are different right across the country, and
we (the government) are interested in the scope for bespoke housing
deals with authorities in high demand areas, which have a genuine
ambition to build."
It's not clear whether this signals the intention of the
government to work with individual local authorities to consider
flexibilities in the Housing Revenue finance system or to the wider
devolution agenda. However, these sorts of supportive statements
and clear messaging from government ministers is something ARCH
have asked for in the past and certainly did not receive under the
previous administration. As such we believe it is to be positively
Matthew Warburton, ARCH Policy Adviser, has produced a
special briefing on the Housing White Paper. It includes a
useful table setting out how the government plans to take forward
each of the main proposals in the Housing White Paper, with
timescales (where known) to identify opportunities for local
authority engagement in policy development and implementation.
This briefing is available to ARCH members only and can be
accessed in the
We'll continue to make the case for council housing through our
on-going discussions with the DCLG and the Housing Minister around
possible deals/bids to increase housing delivery via the Housing
Revenue Account. We've recently confirmed a follow up meeting to
our recent joint submission with the NFA, CIH and CIPFA
with DCLG officials on 2 March.
The ARCH Executive Board and ARCH Tenants' Group will be
considering a formal response to the White Paper.
John Bibby, chief executive, would welcome discussions with
ARCH members with any further ideas or initiatives that the wider
sector could benefit from in the light of this White Paper. Please
email John at email@example.com or
call him on 07511 820 750.
In the meantime we are organising a member event for ARCH
members which will explore the White Paper and what it will mean
for stock retained councils in more detail. Find