Islington's housing boss challenges Theresa May: 'Cut red tape around Right to Buy and grant funding'
PUBLISHED: 09:14 05 October 2018 | UPDATED: 15:50 18 October 2018
Islington's housing boss says scrapping the borrowing cap could make big difference to home building in the borough - but only if the Tories "cut red tape around Right to Buy receipts and grant funding."
Cllr Diarmaid Ward’s comments come after the Prime Minister promised to lift the local authority borrowing cap during her conference speech on Wednesday.
Scrapping the Thatcher-era cap will allow council’s to borrow cash to finance home building – this is also a Labour policy, which Islington Council urged the government to implement ahead of its spring budget.
Cllr Ward said: “As well as the borrowing cap, under the current rules, local authorities only receive 75 per cent of the proceeds of any property that is sold under Right to Buy – the rest goes to the government.
“But government red tape means this receipt is only allowed to be used to pay for one third of the build costs of a new council home: we still need to find the other two thirds.
“Right to Buy proceeds are also not allowed to be combined with any other grant funding, so many councils are struggling to spend them in the time allowed by government.”
Councils were building around 10,000 homes a year before limits were placed on how much a local authority could borrow through the Housing Revenue Fund.
Theresa May again pledged to end austerity at the Tory conference, and said: “Solving the housing crisis is the biggest domestic policy challenge of our generation.
“We cannot make the case for capitalism if ordinary working people have no chance of owning capital.”
But Cllr Ward told the Gazette: “All this red tape around right to buy receipts and grant funding would need to be scrapped as well if we’re going to maximise council home building and tackle the housing crisis.
“The devil will be in the detail, one sentence from Mrs May is not enough – we need action.”
The detail is due to become clearer when Phillip Hammond delivers his budget this month.