Fair and flexible finance for new homesLGA Conference, 29th June 2011
Cllr Jonathan GlanzCabinet Member for Housing and Corporate PropertyWestminster City Council
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
The need for reform – house building
•Lowest house building in peacetime since 1924
• Just 640 completions by local authorities
•Target to deliver 150,000 new homes over a four year period
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
The need for reform – housing crisis
• 1.8 million households on Social Housing Waiting List
• Affordability ratio of 10.3 in England and 13.4 in London
• The average age of a first-time buyer in England without parental support is 39
• More than 1 in 10 households in London are overcrowded
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
We need to build more homes…
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
Progress to date
• New Homes Bonus – financial benefits for local authorities
• Affordable rent – injection of resources
• Flexible allocations – freedom to assign social housing according to local priorities
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
More still to do…
• Fairer rents – 200 social housing tenants in Westminster earn more than £100k p.a.
• Reform the HRA system
• Greater freedom for local authorities
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
Option 1:Borrowing against future revenue streams
• Could be accounted for outside of government DEL limits but still counted as public expenditure
• Precedent set in Scotland
• Would still be subject to the Prudential Borrowing Code and Government would retain powers to impose borrowing limits
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
Option 2: Changing the fiscal rules
A)
• Altering the status of public debt
• ‘General Government Gross Debt’ (GGGD) rather than ‘Public Sector Net Debt’ (PSND)
Or…
B)
• Making an exception of local government
Flexible finance for new homesCllr Jonathan Glanz
29th June 2011
Benefits of reform
• Up to 300,000 new homes over a decade
• Reduced benefits bill and lower cost of temporary accommodation
• Up to £1bn more to invest in existing stock
• Increased employment in the construction sector
• Boost to GDP
