Foundation to Thrive: How to Unlock a Council Housing Revolution

Council-built social homes were the making of modern Britain. The huge post-war building programme, driven by local authorities, delivered genuinely affordable social homes which gave millions of people the foundation to thrive. Local authorities were empowered to build the homes their communities needed, backed by a central government which understood council housing as a national asset and an inherent social and economic good. Although never realised, post-war Minister for Health Nye Bevan conceived of a second NHS – a National Housing Service – and the high-quality council homes built in the immediate post-war period are testament to a vision of home as the foundation for a good life. 

But today we are far from this vision. Councils have not been able to build social homes in any great numbers for decades, and many no longer even own a housing stock. Since the 1980s, barriers have been put in the way of council housing because successive governments have treated council-owned social homes as a financial liability rather than a public good. Housing associations have stepped in as both builders and managers of social housing, taking on many homes originally built by councils. Central government has largely left housing delivery to the private sector, reliant on speculative development of homes for private sale. Neither have replaced the loss of council building in terms of number of new build social homes, while Right to Buy has decimated the stock owned by councils, leading to a net loss of social homes almost every year since 1981.

This net loss has left a huge number of households in need of a genuinely affordable social rent home. Over 135,000 homeless households are now stuck homeless in temporary accommodation – which last year cost councils a staggering £2.8 billion. And over 1.3 million households are now waiting for social homes, with many more struggling with unaffordable private rents. It is widely recognised that ending this housing emergency requires the country to build 90,000 social rent homes a year for 10 years.

The government has already laid important foundations for change. It has boosted grant funding, limited Right to Buy discounts, agreed a long-term rent settlement, and returned focus to social rent as a tenure. Social housing delivery has begun to improve as a result, but nowhere near enough to meet the scale of the crisis.

The new Prime Minister has rightly called for council housebuilding to once again return to post-war levels. This is an ambitious commitment – but it is absolutely the right one to get us on track to building social homes at scale again. This report sets out how to deliver on that ambition by dismantling the in-built bias against council housing with interventions in finance, land, and delivery. Crucially, meeting the ambition will require a united purpose between central and local government, with Westminster loosening the grip that has stifled council housebuilding for decades.

This report sets out how the government can unlock a council housing revolution, with four key steps:

• A financial package to get councils building, including cancelling Housing Revenue Account debt in full and realigning the fiscal framework to unlock grant and loan financing for council-built social homes 

• Establish a national council housing mission, backed with a social rent target and greater support and resources for councils to align planning and housing objectives 

• Prioritise land for council homes with a duty for public land to be used to maximise public good, including for delivery of social rent homes, and backing for councils to use their compulsory purchase powers to disapply ‘hope value’ for low-cost land assembly 

• A council-led programme to acquire empty and neglected homes and convert them for social rent, with the aim of reducing the number of low-income households living in expensive and low-quality private rented sector homes