In a stark warning to the new government, twenty of England’s largest local authority landlords have declared the council housing financial model ‘unsustainable,’ with budgets facing a staggering £2.2 billion deficit by 2028.
A cross-party coalition, including Birmingham City Council, Leeds City Council, and Camden Council, has highlighted the severe impact of inadequate funding and erratic national policy changes on England’s council housing system. The group, referencing a new analysis by Savills, emphasized the urgency of addressing the looming financial crisis.
Ahead of a comprehensive report set to be published later this year, the coalition of council landlords has proposed five key solutions aimed at securing the future of council housing in England:
- Revamping the Housing Revenue Account (HRA) Model: This includes an immediate £644 million one-off rescue fund and establishing long-term, stable rent and debt agreements.
- Reforming Right to Buy Policies: Changes are needed to address the current unsustainable framework.
- Eliminating Bureaucratic Hurdles: Streamlining existing funding processes to enhance efficiency.
- Launching a Green & Decent Homes Programme: A long-term initiative to ensure sustainable housing.
- Revitalizing Stalled Building Projects: Prompt action to resume construction and prevent loss of sector capacity and market downturn.
Cllr Kieron Williams, leader of Southwark Council, voiced the collective concerns, stating, “Our country’s largest council landlords have united because we witness daily how council homes transform lives. For many families, a council home provides the stability needed to thrive, whether in childhood, work, health, or old age.
“However, the erratic policies from the previous government have left council housing finances in disarray, jeopardizing the system’s future. Councils are being forced to halt new developments and even sell off existing homes to prioritize resident safety.
“We are releasing this interim report now to collaborate with the new government from day one, ensuring our communities receive the more and better council homes they desperately need.”
The urgency of the situation underscores the critical need for immediate government intervention to prevent further erosion of council housing resources and to support the continued provision of essential housing services.
Meanwhile, the public sector will continue to rely heavily on the private rented sector whilst at the same time taking an increasingly hostile stance towards landlords. It is ironic that the very people who cannot manage their own houses are telling landlords how to manage theirs.