Guest post for the Labour campaign for council housing

We live in very challenging times, an era when many long-running issues are coming to a head and at times it can seem difficult to know exactly what an incoming Labour Government should prioritise.

For those of us on district-tier authorities, homelessness is by far the most pressing issue we face. The combination of increasing numbers being unable to afford private sector housing and large shortages of social housing are resulting in councils facing record temporary housing costs, putting at risk the survival of other services and forcing hundreds of residents to put their lives on hold.

At the same time, scientists are clear that if we are to have any chance of avoiding catastrophic climate change then as a planet we need to have collectively reached net zero by 2050. This will be an extremely tough target to meet and will require huge amounts of capital expenditure by the UK Government over the next 27 years. Consequently, there is a risk that other priorities for major capital investment, such as council housing, are sacrificed in the rush to hit net zero.

Fortunately, this is not inevitable. In fact, the reality is that council housing provides, by far, a greater opportunity for reaching the UK’s climate goals than could possibly be achieved through private sector housing.

Let’s start with new construction projects. Councils do have the ability to require that all new development within their area contain sustainability requirements through including these within their Local Plans. However, in practice this ability is hampered by two things.

The first is that every Local Plan needs to be signed-off by a government-appointed planning inspector in order for it to take effect and the national framework they are required to assess the plans against has been increasingly rigged in favour of developers over time. As a result, were a council to include the sustainability requirements necessary to avoid a new property from having to be retrofitted by 2050 as part of the effort to hit net zero, no planning inspector would sign-off on the plan. Worse, any sustainability requirements placed on a developer reduces the other requirements which can be included in the plan if it is to be approved, such as those relating to affordable housing.

Secondly, even when a Local Plan has been agreed, developers can avoid having to fulfil requirements if they can demonstrate that the development wouldn’t be ‘viable’ if those conditions were included. I won’t go into the detail of how this is done, but suffice to say that when you are the only one with all the figures, it isn’t hard to create a set of numbers which inflate the construction costs and deflate predicted sales prices in such a way as to meet the requirements of government-appointed district valuers.

In contrast, the only limit on councils in setting sustainability requirements for their own developments are financial. This shouldn’t be understated, as even for a council such as my own, with a large retained housing stock, it is a constant struggle to finance sufficient numbers of new properties to outpace those lost to right to buy. Despite being one of the top-ten performers in the country for delivery of new council housing, in the time it takes us to build four new council properties we lose three to Right-to-Buy.

However, this is something which could easily be resolved by the government through changes to the rules around prudential limits Housing Revenue Account debt, adjusting the discount rates on Right-to-Buy, and returning to the model they used to build New Towns like my own–buying land at agricultural rates and part-funding the project through the growth in the value of commercial property.

In every new Crawley Borough Council housing scheme we’re exploring ways to significantly reduce carbon emissions, from Passivhaus developments where the insulation is so effective they need no other form of heating, to a District Heat Network capable of drastically reducing the carbon emissions of both housing and business space across the town centre (and with the potential for expansion into new areas, retrofitting to use green hydrogen, and introducing electricity generation in the future). More homes being built to better environmental standards helps to reduce carbon emissions right now and avoid placing further pressure upon resources for retrofitting in the future.

Of course, most homes in the UK in 2050 will be the same properties which exist right now, and there too we have far greater options for retrofitting than a private provider. To begin with, councils are already responsible for maintaining their own housing stock and set money aside for undertaking works across all properties over a set period of time. As a result, there is already money in the system for contributing to existing improvement works which can be transferred over to funding equivalent net zero options. If the average boiler has a 15 year lifespan then we know that by 2035 we need to have identified appropriate alternative heating sources for each property and to have put the funding aside to start rolling out replacements.

Councils also benefit from economies of scale. The borough Council owns around 20-25% of housing within Crawley and are consequently the dominant player in the local housing market, providing us with the opportunity to purchase both goods and skills at volumes which are far more cost-effective per unit.

Connected to this, the council will also have expert understanding of the work needed for every type of house in the town, we won’t have to assess each property individually and we have the opportunity to plan out retrofitting in the most cost efficient way. We are currently working with the University of Southampton to identify and map out all the work necessary for our bringing our housing stock into line with the UK’s carbon targets and have been experimenting with different properties for at least the last decade to test what works and what doesn’t.

The costs involved in undertaking this work will still be substantial, but unlike private properties, council tenants do pay the state a rent for their council housing which will be helping to finance the works. Furthermore, by enabling councils to increase their rents to take into account some of the cost-savings tenants will realise through energy savings, we can both enable tenants to gain from the improvements and provide the income stream necessary to help pay for the retrofitting.

No one should doubt the scale of the challenges faced by the next Labour Government, but much as with the drive for growth through Labour’s Green Prosperity Plan, we don’t have to trade off one goal for another. By investing in council housing we not only have the opportunity to resolve the country’s ongoing housing crisis, but we can give the UK its best chance of achieving the changes necessary to overcome the Climate Emergency.

Cllr Peter Lamb
Leader of Crawley Borough Council, 2014-22

Originally posted: https://thelabourcampaignforcouncilhousing.org/2023/03/09/constant-struggle-to-finance-sufficient-numbers-of-new-properties-to-outpace-those-lost-to-right-to-buy/