'Major Breakthrough' on fourth option

Campaigners have claimed a major breakthrough after the housing minister opened the door for direct investment in council homes.

‘Major breakthrough’ on fourth option

Inside Housing, Fri, 1 Aug 2008

In a letter to the party’s housing working group, Caroline Flint agreed there should be a ‘level playing field’ between councils with and without arm’s-length management organisations. She indicated that ‘good’ councils would qualify for social housing grants in order to build new homes.

A spokesperson for Ms Flint said she was not sure if the change represented a ‘fourth or fifth option’ for investment in council stock but ‘what we want is to hit targets for 45,000 [new] social homes a year’.

The spokesperson said that she expected councils to start applying for social housing grants in 2009. She added: ‘[Councils] would use their assets and borrow in a not too dissimilar fashion to ALMOs.’ Meanwhile, the number of homes built ‘depended on the appetite’ of councils.

Daniel Zeichner, who sits on Labour’s housing working group, hailed ‘pressure from within the party’ for the switch.

Easington Council councillor David Taylor-Gooby – also on the working group – described the move as a ‘shift away from the euthanasia of council housing’.

Unison said the move marked the start of a ‘council house-building programme’. Alan Walter, chair of Defend Council Housing, said: ‘The letter is very important because it clarifies that the social housing grant is for council housing with secure tenancies and directly elected council landlords and also [there will be money for] decent homes.’

Housing Quality Network executive director Steve Partridge described the move as ‘significant’. He warned that councils would still be bound by public sector borrowing rules and the Treasury would be unlikely to sanction a spending spree.