Letter to housing secretary also suggests extending low-cost loans to councils
A Labour Party members’ campaign group has urged Angela Rayner to refocus the government’s flagship £39bn Social and Affordable Homes Programme (SAHP) on social rented homes provided by councils.
Rayner was reappointed as housing secretary last week Andy Burnham after less than a year out of the job, with the new prime minister having made council housing a major part of his pitch for the Labour leadership.
While the topic was mentioned prominently in his speech on the steps of 10 Downing Street, it has not yet been part of the new administration’s policy blitz, which has included caps on bus fares, cuts to VAT on household energy bills and hospitality business rates, and a commitment to new technical education pathways.
How he plans to deliver “the biggest council house building programme since the post-war period” remains the subject of speculation, however the secretary of the Labour Campaign for Council Housing has written to Rayner, arguing that this ambition can only be achieved “if the funding is directed at social rent council housing, and grant is significantly increased”.
In the letter, the campaign disputed a claim in a recent video published by Rayner that the £39bn Social and Affordable Housing Programme would “support councils to deliver that house building that we haven’t seen for a generation”.
It said that the programme “as currently constituted, won’t achieve that result”, noting that “not a single penny of the funding is specifically directed at council housing”.
Instead, the campaign argued, councils “have to compete with housing associations, for-profit providers, and even builders/developers, for the grant”. Homes England and the Greater London Authority, which adminster’s the capital’s share of the grant funding, are currently assessing grant funding bids.
In its current form, funding from the SAHP is not only open to developers of homes for social rent, but also for other forms of affordable housing, such as affordable rent, which requires less grant but is more expensive for tenants and can be up to 80% of local market rents.
The letter further noted that low-cost loans available for housing associations and for-profit providers, available at an interest rate of 0.1%, were not available to councils, which have to borrow from the Public Works Loans Board at around 6%.
“If you want to encourage councils to build council housing then you need to offer them a much lower interest rate than currently available,” wrote Wicks.
Noting reports that the government was considering private funding to support its building plans, Wicks wrote that this would be a “mistake”, claiming that private funding was “more expensive than funding from the Public Works Loans Board” and resulted in fewer social rent homes.
Rayner’s appointment as secretary of state for the Ministry of Housing, Communities and Local Government came alongside news that Matthew Pennycook, re-appointed as her housing minister, would attend cabinet alongside her.
It was subsequently announced that Jim McMahon would return to the junior ministerial team at MHCLG, joined by former Commons housing committee chair Florence Eshalomi, and Sally Jameson.
In a move that may hint at his intentions for the department, Burnham has appointed two ministerial aides at MHCLG from the Socialist Campaign Group (SCG), the furthest left faction within the parliamentary Labour Party.
Olivia Blake, MP for Sheffield Hallam, will be the parliamentary private secretary for local government, while City of Durham’s Mary Kelly Foy will assist Pennycook with his brief.
Along with Steve Witherden, appointed as an aide to the energy department, they are the first SCG members ever to hold government positions.
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