Local councils and authorities used to build many more homes than they do now. In 1969–70, 135,700 homes were built by local authorities. In 1999–2000, they completed just sixty homes. Although there’s been an increase in recent years, the 2015–16 figure was only 1,890. The majority of new houses are built by private companies or housing associations.
This is important because there are not enough houses in the UK to meet demand, which feeds into issues such as high rent, low property ownership and homelessness.
One of the main reasons local authorities build so few houses is that the amount of money they can spend on housing projects is capped. This is to prevent local authorities from accruing too much debt. Organisations like the Local Government Authority (LGA) believe that the spending cap must be lifted to ease the housing crisis.
In November 2017, the government released their Autumn Budget. The Budget increased the spending cap by £1 billion and was aimed at local authorities with the highest demand for housing. The Budget also threw in a rule that meant council tax could be increased on empty properties, which was intended to nudge people to sell their empty homes and free up more housing stock.
This move was welcomed, but many argued it didn’t go nearly far enough, especially if the government hoped to meet its target of 300,000 houses built every year. The Treasury Committee, which sits in Parliament and makes sure the government is doing its job, recommended that rather than increasing the spending cap, the government should remove it altogether.
Despite this criticism, the government’s new budget does make it more likely that local authorities will increase their house-building rates, even if some argue the change doesn’t go far enough. It is too early to mark this policy ‘done’, but we are satisfied that it is at least ‘in progress’. We will assess whether the government’s new budget makes any difference to local authorities later on and make a final judgement then.