Home NEWS Science Let us borrow to build homes, head of the Local Government Association urges the Chancellor

Let us borrow to build homes, head of the Local Government Association urges the Chancellor

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The chairman of the Local Government Association has urged the Treasury to lift the cap on council borrowing in next week’s Budget, saying: “Councils need to be able to build again if the Government is serious about tackling the housing crisis.”

Lord Porter, a Conservative peer and also a former builder, has written to the Chancellor urging him to let councils borrow to build new affordable homes in a move that would not affect the Treasury’s coffers.

During the Conservative Party Conference, the Prime Minister Theresa May pledged a “rebirth of council housing”, with a £2bn fund that councils and housing associations can bid for to build social and affordable homes.

The cap on the amount local authorities can borrow under the Housing Revenue Account has been in place since 2012. It means that councils are able to borrow against assets for facilities such as swimming pools but not to build housing. A change to this rule would not cost anything. However, it would simply give councils the ability to borrow against the unmortgaged value of the existing social stock that they own. 

Lord Porter said: “Now is the time to step up. [Mrs May] said she wants us to step up, and we’re ready to step up. Now we need to be given the freedom to be able to.”



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