In March 2024, Southwark Council hosted a summit with 20 of the
largest council landlords in England to discuss the shared
challenges and ambitions for the future of council housing.
It was decided to commission a
report on the challenges facing council housing and how best to
secure its future. The report was published on 30 August. Its
recommendations have been endorsed by more than 100 council
landlords, responsible for 1.2 million homes.
The report concludes: "Our
country's council housing financial model is broken and the
system's future is in danger - with a £2.2bn black hole in
councils' housing budgets expected by 2028. Our 2012 self-financing
settlement with the government was based on a ten-year deal that
would ensure our rent incomes were predictable and increasing, and
that our costs were foreseeable. But that deal was not honoured by
the last government. Whilst we have been expected to deliver our
side of the agreement, repeated policy changes from central
government imposed new costs on councils while at the same time
restricting our income."
It recommends:
"In recognition of the severe
impact the last decade of national policy choices have had on
council housing budgets, we call for an emergency capital funding
injection of £644m, equal to the income lost from the 2023-25 rent
cap. This will stabilise our HRAs in the short term and prevent
further waste caused by delaying or cancelling investment
plans.
Then, at the next Spending
Review, we call on the government to:
1. Establish a
new fair and sustainable HRA model: including a long-term and certain
rent-settlement, an adjustment of HRA debts and more favourable
conditions for council investment.
2. Reform unsustainable Right
to Buy policies: by reducing discount levels and
eligibility, as well as protecting newly built council homes from
sale.
3. Remove red
tape on the Affordable Homes Programme and other
funds: including
extending the strategic partnership model to councils. Funding
should be streamlined, allocated simply, reflect recent cost
inflation, and allowed to be used flexibly to meet local housing
needs.
4. Announce a
Green & Decent Homes Programme: a long-term, capital-funded
programme to bring all council housing up to the new standard of
safety, decency and energy efficiency by 2030 - and a road map for
achieving net zero by 2050.
5. Fund the
completion of new council homes: limit the short-term loss of housing
supply and construction sector capacity caused by the unfolding
market downturn, by funding councils to rescue and complete stalled
development projects.
Our detailed and practical
recommendations will get the system back on stable foundations,
enable us to bring all homes up to the standards our residents
deserve and unlock our potential to deliver the next generation of
council homes. We look forward to working with the new government
to secure the future of England's council housing."