MPs Urge Government to Scrap Council Borrowing Caps

MPs have called on the government to rethink the ‘unnecessary’ cap on council borrowing as a way to increase investment in new housing supply. A report from the communities and local government select committee’s inquiry into housing finance recommends a wide range of measures aimed at attracting more funding to allow both housing associations and local authorities to build more homes.  The move to give councils greater borrowing power was backed by the Local Government Association.  The report is also critical of a number of current government policies, including the affordable rent programme run by the Homes and Communities Agency. It recommends that the government bring forward proposals on how to deliver affordable housing after the end of the programme in 2015 so they are in place by the end of 2012. It also calls for the ‘rebalancing of subsidy arrangements’ to take some burden away from housing benefit.  Download a copy of the report from the Parliament website.