Government may relax financial rules on council housing

Prime minister Gordon Brown has signalled he is willing to waive financial restrictions to allow a new wave of council housebuilding in the UK.

Brown told a conference of the New Local Government Network that it was essential that councils be allowed to build, if they were able to persuade government they will be able to do it quickly and efficiently.

His comments take on a report published by the communities department last week outlining the possibility of new financial freedoms for council housing authorities. Getting councils to develop homes would be a way to meet need whilst also using “spare capacity” in the housebuilding industry.

Brown said: “In the past we have placed restrictions on local authorities delivering social housing. But let me today be clear, if local authorities can convince us that they can deliver quickly and cost effectively more of the housing that Britain needs, then we will be prepared to give you our full backing and put aside any of the barriers that stand in the way of this happening.

He added: “We will not allow old arguments and old ideologies to stop us getting on with the job together when there are families who need homes, when there are bricklayers, carpenters and electricians ready and willing to work, when there are construction companies that are ready to build houses.”

He said he would report on further measures in the coming months on role that local authorities can play alongside of course the social housing reform.

Sarah Webb, chief executive of the Chartered Institute of Housing, said it was great news. She said: “We are delighted to support anything that can help build more houses. Many of us have worked long and hard for many years to secure these changes to local authority rental income and access to finance. The promised changes can provide a much needed boost to housing in these challenging times.”

However, the Liberal Democrats accused the prime minister of dithering. Liberal Democrat shadow housing minister, Sarah Teather said: “For years, Labour and the Tories have blocked councils' attempts to build social housing and created the housing crisis we are faced with today.

“Instead of more dithering, the government must inject serious funds into social housing right away to buy up land and unsold properties while the market is low.”