May lifts the cap

Fri 5 Oct 2018
Rabbit 05/10/18

Theresa May announced that the cap on council borrowing will be scrapped. Doing away with the cap would allow an extra £10-15bn of borrowing. This money could be used to build an extra 15-20,000 new council homes a year over ten years.

How will it do that? 
Housing Associations borrow money to fund housebuilding. Before today’s announcement, councils’ borrowing powers for council housing were limited. Caps on borrowing were imposed on each of the 169 councils that had housing stock in April 2012, based on calculations under the old Housing Revenue Account (HRA) subsidy system. This was to limit the public sector borrowing deficit. Details will be revealed in the autumn statement.

Bourne Estate - 05.10.18

Bourne Estate, Matthew Lloyd Architects. 2018 overall winner, Camden Council. (Image credit: Housing Design Awards)

Formally, the announcement only affects planning and design in so much as there will be more homes to build. However, partly due to concerns about the condition of homes, recent council house building has been undergoing a small renaissance in quality as well as quantity. In 2017/18, local authorities built almost 2,900 council homes, as a result of the Treasury already relaxing the rules around local authority borrowing. Although still low, it’s a huge improvement on the 1997 figure, when just 400 council houses were built. 

David Birkbeck,  chief executive of Design for Homes and responsible for the Housing Design Awards explains, 'Many council houses are now challenging or even surpassing the private sector in terms of quality, confidence and ambition. When it comes to the design of elements like common parts and public realm, they are frequently setting the benchmark. An emboldened public sector is this year’s defining legacy'.

St Andrew Riverside - 05.10.18

 St Andrew Riverside, Tiverton, Mikhail Riches Architect, Mid Devon district council.  

Until next week. Please make sure to send in your ideas to
Author: Jane Briginshaw, Design England

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