‘A wasted opportunity’: Council lambasts Chancellor’s Spring Statement

Councillors have criticised the Chancellor for failing to prioritise badly needed new Council homes.

Council housing construction
New homes under construction. Islington Council is calling on the Treasury to remove red-tape, which they say is blocking the building of new council housing in the borough.

Islington Council has called the Chancellor’s Spring Statement a ‘wasted opportunity’ as Philip Hammond failed to remove red-tape blamed for halting funding for new council homes.

The council had called on Mr Hammond to give priority to building badly-needed council homes but said there was ‘no movement’ on the issue despite a £1.7bn boost for affordable housing in London.

Cllr Diarmaid Ward, Executive Member for Housing and Development, said: “We want to build even more new council homes and genuinely affordable housing.

“To help us do that, we have urged the government to cut red tape and restrictions that are stopping Islington and other councils from building new homes for local people.”

The government’s current council borrowing cap means that Islington Council cannot borrow beyond the set threshold to build more homes. The threshold was, however, raised in the Autumn Budget 2017 by £1 billion as part of the government’s commitment to achieve its target of 300,000 new homes per year.

Despite the loosening of government rules, the Treasury Select Committee has called for the threshold to be axed completely.

Nicky Morgan MP, Chair of the Treasury Committee said in January this year: “The Chancellor pledged to ‘fix the broken housing market’ and although the increase in the cap on borrowing for local authorities to build homes is a step in the right direction, it doesn’t go far enough.

“To achieve the government target the cap should be abolished and the potential of local authorities to build should be unleashed.”

There is yet no sign that the ‘red tape’ will be removed as Mr Hammond made no mention of the regulations in the shorter-than-expected Spring Statement on Tuesday.

Instead he chose to focus on assigning an extra £1.7 billion for affordable housing in London and updating the house on the Land Remediation Fund which is designed to unlock land for housing.

Cllr Ward tweeted his disappointment at the lack of movement on the borrowing cap, saying: “No movement on the borrowing cap in the #SpringStatement. Such a wasted opportunity. The #NewHomeBlocker remains.”

He also took swipes at government cuts to council funding, saying: “Next year we will build 200 new council homes, thanks to investment we have chosen to make, despite ongoing massive government cuts to the council’s core funding.”

These updates come after The Guardian reported last week, that £817 million allocated for housing projects run by local councils in 2017-18 had been returned to the Treasury unspent.

Responding to the Spring Statement, the Shadow Chancellor John McDonnell, said: “Conservative councils are going bust. Many will be forced to hike up council tax.”

According to the 2018 State of Local Government Financial research, council tax is set to rise in 95 per cent of councils.