HRA cap: collaboration is now vital to boost housebuilding

Since the 1970s, the introduction of the Right to Buy scheme has caused problems. Not only have local authorities ended up getting less value for taxpayer-funded assets, it has also resulted in a huge shortage of social housing, which has meant a hike in rent prices and the subsequent increase in homelessness.

Political parties of all colours in local government are clear: councils need the freedom and power to be able to build social housing to alleviate the housing crisis and reduce their homelessness spend, which is particularly acute in London and the South East.

We now need to see councils engage on a major national programme of housebuilding, with the ultimate aim of producing one-third of all homes built. Now the borrowing cap has been lifted, they need to take a more positive approach to development, as they will be held accountable by stakeholders for insufficient progress on social housing levels.

But while local authorities may now have the financial ability to build, there is currently not enough capacity in the UK to deliver it. The sector needs to focus on recruiting skilled workers from across the globe – in the same way the NHS does – and migration policies need to allow this to be possible.

There will be a long-term requirement, given we need 300,000 homes a year according to government figures, and we are currently only doing just north of 120,000.

But housing associations also have an important part to play here. With local authorities, they have a common aim – to provide quality, affordable housing to the people in their communities. While some housing associations may now be worried that they will be crowded out by the growing capability of councils – a sentiment reflected by the Office for Budget Responsibility predicting that the increase in council building will actually cause a drop in the level of developments from private house builders and housing associations – they instead need to focus on how they can work better together to deliver more.

To see true diversity within the housing sector again, there need to be financial incentives to build social housing. Rather than the charade of social housing percentage aims that are never followed through, introducing performance subsidies from the government would encourage them to be prioritised.

Such large-scale developments call for highly skilled labour, but also require people with the skills to effectively manage them. Both housing associations and local authorities are currently lacking the numbers required, and the sector needs to invest in either attracting or upskilling individuals to meet this demand.

This is a collective opportunity to implement great change and progress within the housing sector – so how can local authorities and housing associations work more strategically together?

Both types of organisation need to have a detailed and comprehensive understanding of their community make-up and resulting needs, and ensure a joined-up approach by the effective sharing of information and knowledge. This will allow them to correctly ascertain the type of housing required, the affordability of rents, access to sites to build on and how best to maximise the funding landscape to ensure appropriate provision.

One model that is already working is where councils may fund the property and control the tenancies, and housing associations will oversee the development and tenant management. We need to see an increase in these types of arrangements and encourage the sharing of development management resources between both local authorities and housing associations, if we are to meet the shared aim of boosting the level of social housing.

Jenny Brown is chief not-for-profit operating officer and Paul Dossett is head of local government at Grant Thornton UK