Lib Dems call for councils to be given back housebuilding powers

Lib Dem leader Vince Cable has said councils must be able to borrow to build homes. Speaking at the Liberal Democrat Party Conference, Cable called for a return to the pioneering spirit of the 1950s and 1960s which saw swathes of social housing under development.

“For years, politicians have waffled about house building while tinkering at the edges of the market,” he said. “I want to recapture the pioneering spirit that in the mid-20th century brought about developments like Milton Keynes and the new towns…I want to see a new generation of garden cities and garden villages spring up in places where demand presently outstrips supply.

“But we know that private developers alone will not make this happen. Just as social reformers in the 1950s and 60s saw government roll up its sleeves and get involved with building, government today has a responsibility to be bold…and to build more of the homes we need for the 21st century. It is utterly absurd that councils are allowed to borrow to speculate in commercial property…but are stopped from borrowing to build affordable council houses.

“This triumph of ideological dogma over common sense must stop. Government must take the lead…and get building. The housing crisis is at the heart of a growing and deeply corrosive inequality…between generations.”

The sentiment has been welcomed by construction industry bodies. Brian Berry, Chief Executive of the FMB, said: “Mr Cable is absolutely correct in saying the Government must be bold if it is to solve the housing crisis. The private sector will continue to play the lead role in building our way out of the housing shortage and if SMEs are given the access to finance and access to land they need, these firms will deliver many more homes than they do currently.

“We’ve only ever built at the level we need to keep pace with demand when both the private and public house building sectors were simultaneously firing on all fronts. For example, in the 1960s, we were building around 400,000 homes per year and half of those were social housing.

Investment by local authorities in a new generation of social housing would deliver many more homes that the country needs urgently. This could also help aid the expansion of private sector output by providing more opportunities for SME builders.

“Local authorities are currently constrained in the amount they can borrow to invest in housing by an artificial cap. If this was changed and replaced with prudential borrowing rules, it could empower local authorities to take much fuller advantage of their borrowing power to supplement private sector supply and build thousands more new social homes.

“Put simply, if we are to build our way out of the housing crisis, private sector and local authorities alike must be allowed to build to their full potential.”

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