Council More Than Doubles Building Plans As Result Of New Financial Freedoms

Sheffield City Council has doubled the number of council homes it is planning to build, following the government’s decision to remove the Housing Revenue Account (HRA) borrowing cap on local authorities. The council announced it is planning to up its delivery of homes by more than 100% over the next seven years from 1,500 homes to 3,200 homes. Read more on Inside Housing.

https://www.insidehousing.co.uk/news/news/large-city-council-more-than-doubles-building-plans-as-result-of-new-financial-freedoms-62327

Construction Sector Loses Patience With Brexit Indecision

The markets' patience with Brexit related indecision appears to be wearing thin, as the results of the Q2 2019 RICS Construction and Infrastructure Market Survey shows output growth accelerating, and workload and employment expectations gathering pace for the year ahead. This quarter, 16% more respondents reported an increase in construction workloads, up from a +9% net balance in Q1. Relative to other sectors, workloads in public housing grew at the fastest pace, closely followed by private housing. The rise in workloads in social housing (+26% up from +6%) suggests that the lifting of the HRA borrowing cap may have begun to influence sentiment in social housing construction. Read more on the RICS website.

https://www.rics.org/uk/news-insight/research/market-surveys/uk-construction-and-infrastructure-survey/q2-2019/

Housing: Construction – Parliamentary Written Answer

Sir John Hayes: To ask the Secretary of State for Housing, Communities and Local Government, at what rate he estimates the UK needs to build houses in order to cope with the additional demand created by current levels of immigration.

Kit Malthouse: The Government is committed to delivering the right homes in the right places. We are making progress, and latest figures show over 222,000 new homes were delivered in 2017/18 in England - the highest level of new homes delivered in all but one of the last 31 years. But we are determined to do more in order to deliver the homes communities need. That is why we have set out an ambitious package of measures to deliver 300,000 homes a year by the mid-2020s. These measures include over £44 billion of financial support, planning reforms and scrapping housing revenue account borrowing caps so councils can deliver a new generation of council housing.

http://www.parliament.uk/business/publications/written-questions-answers-statements/written-question/Commons/2018-12-20/204387

Government Sets Date To Lift Borrowing Cap

Councils’ Housing Revenue Account (HRA) borrowing caps will be scrapped in less than two weeks’ time, a government document has revealed. Communities secretary James Brokenshire has written to the chief executives of all stock-retaining local authorities presenting a draft plan for removing the cap. Measures outlined in the document will come into force on 30 October, the day after the Autumn Budget. HRA borrowing will be restricted by the Prudential Code only. Read more on the Newstart website.

https://newstartmag.co.uk/articles/government-sets-date-to-lift-borrowing-cap/

New Housing Minister Criticises Councils Over Unused Borrowing Capacity

The new housing minister has said he is “at a loss” to understand why councils are not using Housing Revenue Account (HRA) borrowing headroom. Kit Malthouse made the comments during his first appearance before parliament in the role. He was responding to a question from Alex Norris, Labour MP for Nottingham North. Mr Norris asked: “The building of new homes is being choked off in Nottingham by the refusal of the department to remove the cap on the HRA.” The programme is only available to local authorities in which weekly private rents are £50 higher than social rents on average. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:UM_bqa9IJXQJ:https://www.insidehousing.co.uk/news/news/new-housing-minister-criticises-councils-over-unused-borrowing-capacity-57322+&cd=4&hl=en&ct=clnk&gl=uk&safe=vss

Councils ‘Challenging’ Ministers After Exclusion From £1bn HRA Headroom Deal

Councils which worked with government to develop new funding flexibility for new homes have hit out at ministers after being excluded from bidding. Two councils that worked with government officials for more than a year to develop plans to allow councils to increase their borrowing capacity have said they were “disappointed” to discover they would not be allowed to bid for the fund. The government revealed last week that only councils where private rents are £50 more than social rents would be allowed to bid. This saw Sheffield, Stoke-on-Trent, and Newark and Sherwood councils excluded. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:WJOJgVqQtzYJ:https://www.insidehousing.co.uk/news/news/councils-challenging-ministers-after-exclusion-from-1bn-hra-headroom-deal-57078+&cd=1&hl=en&ct=clnk&gl=uk&safe=vss

Councils Call On Government To Go Further With HRA Funding Freedoms

Councils are calling on the government to go further after a senior official revealed a long-awaited £1bn fund can be combined with Right to Buy receipts and grant. Rebecca Shrubsole, a senior official in the Ministry of Housing, Communities and Local Government, said the new Housing Revenue Account (HRA) borrowing programme announced in the Autumn Budget will be free of the “restrictions” of the last HRA programme in 2012, which was quietly wound down after £220m was allocated to build just 3,000 of the 10,000-home target. Read more on Inside Housing.

https://webcache.googleusercontent.com/search?q=cache:M4PP_6Y8vacJ:https://www.insidehousing.co.uk/home/home/councils-call-on-government-to-go-further-with-hra-funding-freedoms-56178+&cd=1&hl=en&ct=clnk&gl=uk&safe=vss

Council Housing – Parliamentary Written Answer

Mr David Lammy: To ask the Secretary of State for Communities and Local Government, if he will make an assessment of the potential effect of a removal of the borrowing cap on local authorities' housing revenue accounts on the output of new council houses.

Brandon Lewis: We have no plans to remove the limits on indebtedness but we have been able to make available an additional £300 million borrowing over 2015/16 and 2016/17 and those councils that needed additional borrowing have now had two opportunities to bid for additional borrowing. I announced on 9 October that £178 million additional borrowing was still up for grabs in the second bidding round. We are now considering those bids. 

Local Growth Fund: Housing Revenue Account Borrowing Programme (2015 to 2016 And 2016 To 2017)

The housing revenue account borrowing programme makes available an additional £300 million borrowing for 10,000 new affordable homes over 2015 to 2016 and 2016 to 2017. This was announced in the 2013 Autumn Statement as part of the Local Growth Fund and is available to local authorities who have a proposal agreed by their Local Enterprise Partnership.

• The prospectus sets out the detail of how local authorities can bid for additional borrowing and sets out the process and timetable for submitting bids.
• The application form sets out information a local authority should provide when applying for the Secretary of State’s consent under Section 25 of the Local Government Act 1988.
• The frequently asked questions document has been compiled to help local authorities that are interested in bidding for additional borrowing under the housing revenue account borrowing programme.

Download the documents from the GovUK website.

Local Growth Fund: Housing Revenue Account Borrowing

 Kris Hopkins writes to local authority leaders about additional housing revenue account borrowing (Extract follows).

“The Government has announced today (7 July) an increase of £60 million in additional Housing Revenue Account borrowing across fifteen local authorities to help increase the numbers of affordable new homes in England, and I am also announcing that we will be holding a second bidding round for new schemes in 2016/17 to the programme”

Download the full letter from the GovUK website.