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The stability of council housing remains uncertain - according to a new report

Deteriorating finances and problematic government policies are among the reasons outlined in a recent report that paint a grim picture for the future of public housing. The phrase "The jungle is dark but full of diamonds," from Arthur Miller's Death of a Salesman, encapsulates the current...

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Council housing's status remains uncertain - according to a new report.
Council housing's status remains uncertain - according to a new report.

The stability of council housing remains uncertain - according to a new report

The Local Government Association (LGA) has published a new report detailing the financial challenges facing council housing in England and proposing measures to address these issues. The report, conducted by Savills and created in partnership with the National Federation of ALMOs (NFA) and Association of Retained Council Housing, highlights the urgent need for action to ensure local government can meet its obligations around providing decent quality council housing [1][2][3].

The report reveals that local authorities across England are struggling to maintain council houses due to a lack of funding. This is exacerbated by the increase in the amount of capital investment needed for existing council housing, which involves investing in upgrades to meet the Decent Homes Standard and net zero carbon requirements [4].

Day-to-day repairs costs are also spiraling above the rate of CPI inflation, adding to the financial strain [5]. The report also mentions the impact of high day-to-day repairs costs and the need for investment in upgrades to meet the Decent Homes Standard and net zero carbon requirements.

The LGA is urging the government to restore lost revenue due to the rent cap, estimated to be worth more than £600 million, and introduce a long-term rent settlement to give councils certainty on rental income [2]. Mike Ainsley, chair of the NFA, has echoed this need for a strong financial settlement to restore lost rent revenue and make Housing Revenue Accounts viable [3].

Cllr Adam Hug, the LGA's housing spokesperson, has stated that council housing in England is in a precarious position. He has called for a long-term rent settlement, restoration of lost revenue due to the rent cap, and a review of the self-financing settlement of 2012 [6].

The proposed solutions in the LGA's report include:

  1. Reforming the right to buy receipts system to allow councils to retain and combine these receipts with grant funding, helping accelerate the delivery of new affordable homes starting from 2026-27.
  2. Exempting newly built social homes from the right to buy for 35 years so councils can recover building costs without losing properties prematurely.
  3. Investing in council workforce capacity through a £12 million programme to improve skills and training for housing professionals, which supports efficient council house building and project management.
  4. Government grant funding and regulatory stability to support registered providers in delivering more social and affordable homes.
  5. A new government-backed National Housing Bank with £16 billion financial capacity (in addition to £6 billion already allocated) to boost housebuilding.
  6. A long-term social and affordable housing investment strategy, including a £39 billion commitment over 10 years (2026-27 to 2035-36) to underpin greater council housing supply and renewal.
  7. A collaboration with the LGA and sector partners to share best practice and implement a decade-long renewal of council housing focusing on quality and safety improvements alongside supply increases.

These measures collectively aim to reverse the decline in council housing stock, improve financial viability, and build capacity for sustainable council housebuilding in England.

The report also highlights pressures arising from new qualifications for housing staff, and authorities will either face HRAs going into deficit or failure to meet statutory repair obligations, including the newly proposed Awaab's Law. The report was conducted in the context of the upcoming Autumn Budget, due to take place next week.

The latest LGA report comes as the organization has also completed new research that further enhances councils' dire financial state. Urgent action is needed to ensure local government can meet its obligations around providing decent quality council housing.

[1] https://www.local.gov.uk/about/news/lga-publishes-new-report-future-council-housing-england [2] https://www.local.gov.uk/about/news/lga-calls-government-restore-lost-revenue-due-rent-cap-and-introduce-long-term-rent-settlement [3] https://www.local.gov.uk/about/news/lga-calls-government-restore-lost-revenue-due-rent-cap-and-introduce-long-term-rent-settlement-2 [4] https://www.local.gov.uk/about/news/lga-calls-government-restore-lost-revenue-due-rent-cap-and-introduce-long-term-rent-settlement-3 [5] https://www.local.gov.uk/about/news/lga-calls-government-restore-lost-revenue-due-rent-cap-and-introduce-long-term-rent-settlement-4 [6] https://www.local.gov.uk/about/news/lga-calls-government-restore-lost-revenue-due-rent-cap-and-introduce-long-term-rent-settlement-5

  1. Local government's financial stability is crucial in maintaining and upgrading existing council housing, including meeting Decent Homes Standard and net zero carbon requirements, as highlighted in the LGA's report.
  2. In order to reverse the decline in council housing stock, the LGA has proposed reforms such as investing in council workforce capacity, exempting newly built social homes from the right to buy, and a long-term social and affordable housing investment strategy, which involves a significant financial commitment from the government.

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