Social Rented Housing: Construction

Thursday 26th October 2017 Lords Chamber

Question

11:29

Asked by

[Lord Greaves]

To ask Her Majesty’s Government, in the light of the comments by the Secretary of State for Communities and Local Government on 22 October about investment in housing, whether they intend to finance an increase in house building by councils and housing associations through increased borrowing; and if so, how many additional houses they intend should be built within the next five years.

[Lord Greaves (LD)]

My Lords, I beg leave to ask the Question standing in my name on the Order Paper, and remind the House of my interest as a district councillor.

[The Parliamentary Under-Secretary of State, Department for Communities and Local Government and Northern Ireland Office (Lord Bourne of Aberystwyth) (Con)]

My Lords, we are keen for local authorities and other social landlords to build more homes. That is why we have recently announced an additional £2 billion increase in the affordable homes programme to more than £9 billion for affordable housing, including social rents. We have also provided rental certainty for social housing from 2020, which will enable social landlords to plan their homebuilding programmes more effectively. Nevertheless, we continue to be open to dialogue with our local authority partners about any constraints holding them back.

[Lord Greaves]

My Lords, at the weekend the Communities Secretary said that the Government should borrow a lot more money in order to build between 275,000 and 300,000 houses a year in England alone. Since then, the Chancellor said in reply to my right honourable friend Vince Cable in the House of Commons that this was not government policy. Do we still have collective Cabinet responsibility in this country, or do we have a system in which Cabinet Ministers simply debate with one another in public?

[Lord Bourne of Aberystwyth]

My Lords, I remind the House of the commitment of the Government to build 1 million more new homes by 2020 and an additional half a million by 2022. In pursuance of that, we look at the borrowing capacity of local authorities. They currently have £3.6 billon of housing revenue account headroom available. We increased the borrowing capacity by £300 million in 2013, of which only £144 million has been taken up. As I have said, we remain open to discussing this matter and indeed do so with our local authority partners.

[Lord Deben (Con)]

Will my noble friend accept that we are building almost all our houses to a standard which means that they will have to be retrofitted because the energy efficiency is so low? Will he give a commitment that those 1 million houses will be built to a standard which enables people to afford to heat them, because we have started off in the right way instead of having to do it afterwards?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend is very well versed in these matters—few people in the House have more experience than him—and I know that we worked closely together when I was in another department in relation to climate change. It is true that retrofitting is a large part of what is happening at the moment; it is also true that we must seek to minimise the need for retrofitting based on present experience and knowledge. Nevertheless, there is a massive backlog of retrofitting that will keep us very busy for a long time in order that we meet those important climate change targets which the Government are determined we hit.

[Lord Kennedy of Southwark (Lab)]

My Lords, I refer the House to my interests in the register, particularly as a councillor in the London Borough of Lewisham and as a vice-president of the LGA. Yesterday, the Minister’s noble friend Lord Young of Cookham, replying to a question from my noble friend Lord Beecham, said that,

“there are circumstances in which we would consider lifting the local authority borrowing restrictions”.—[Official Report, 25/10/17; col. 935.]

What are those circumstances?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend Lord Young is absolutely right: of course there are circumstances. As I have indicated on two occasions this morning, we are discussing with local authorities the headroom available. Obviously, that depends on circumstances; they differ very much from area to area. We have reached a good agreement with the London mayor and the GLA, but there may be such circumstances and we will react to them. It is a pragmatic approach and not an ideological one.

[Lord Scriven (LD)]

My Lords, I refer to my interests in the register, particularly as a member of Sheffield City Council and a vice-president of the LGA. The £2 billion that the Minister referred to will on average build 11 new council homes in each local authority area each year. As it is estimated that 85,000 council houses per year will need to be built by local authorities, this will not solve the housing crisis. What new powers and borrowing powers will the Government give to local authorities to deal with the housing crisis?

[Lord Bourne of Aberystwyth]

My Lords, in relation to the £2 billion the noble Lord mentioned, obviously we will come forward with additional information on how that money is to be deployed; much of it will be for social rent, but it is an additional amount, as he rightly says, on the affordable housing budget. Nobody is suggesting that there is a single silver bullet here. There is much ground to be made up, as my right honourable friend the Secretary of State has made absolutely clear. However, we have considerable powers, as shown in the White Paper, which we will be exercising through, in many cases, secondary legislation. We have infrastructure money that we have invested. We have money releasing funding for separate pieces of land. We are doing bespoke deals with local authorities, such as Leeds, Manchester and the West Midlands. We are using many different weapons in the armoury, but I agree with the noble Lord that there is no single silver bullet. That is certainly the case.

[Baroness Eaton (Con)]

My Lords, can the Minister tell me what evidence there is to show that Her Majesty’s Government are making affordable housing a priority?

[Lord Bourne of Aberystwyth]

My Lords, my noble friend will be very much aware, because she takes a great interest in these things, that there is considerable evidence of that, as I have just demonstrated in relation to the White Paper: a £2.3 billion housing infrastructure fund; a £45 million land release fund; money going to build to rent, which will be announced in the new year; bespoke housing deals with Leeds, Manchester and the West Midlands, which are well progressed, and others; garden cities and towns that will be coming forward shortly and are very much instrumental; as I have indicated, additional money is going into the affordable housing budget; and a planning fees increase will be brought in by the end of the year that will give more money to planning departments, which will help local authorities. So, there is no shortage of energy and successful action in tackling this deep-seated problem.

[Lord Alton of Liverpool (CB)]

My Lords, will the Minister tell the House what part low-cost homes for sale, self-builds, housing co-operatives and housing renewal of dilapidated properties—that can be maintained and kept for the future if properly renovated—are playing in the Government’s strategy?

[Lord Bourne of Aberystwyth]

My Lords, the noble Lord is right that those are instrumental. If I could take one to tell him about: on self and custom builds, local authorities are very much being encouraged to progress that. They are being obliged to; they have to keep a register in relation to right to build, which we are very keen on. He is right to signal those as important. In order to give him a fuller answer, I will write to him on all of those points, if I may, and put a copy in the Library.