CamdenNewJournal

The independent London newspaper

New house-building hopes as Theresa May lifts Town Hall’s borrowing cap

Tories and Labour clash over money spent on construction costs

04 October, 2018

Labour’s Danny Beales welcomed Prime Minister’s conference announcement

CONSERVATIVES claim a new wave of council house building can begin after Theresa May announced she would scrap the borrowing cap restraining local authorities.

Camden Conservative group leader Councillor Oliver Cooper, who has spent all week at his party’s conference in Birmingham, said councils would have “no excuses” for not building after the prime minister confirmed the relaxation in the rules yesterday (Wednesday).

Mrs May said during her conference speech that the cap was holding councils back and that “solving the housing crisis is the biggest domestic policy challenge of our generation”. But the announcement came amid a row between councillors in Camden over how much the Labour council spends on construction costs for homes, with claims it is wasting millions of pounds compared to prices paid by other London local authorities.

Tory research showed that while Camden pays, on average, around £400,000 per home in build-out costs, neighbouring Westminster pays £315,000 and Islington only £278,000. These figures do not include land costs.

The figures will be raised at Monday’s full council meeting when Conservatives are planning their fiercest criticism of Camden’s Community Investment Programme (CIP), the council’s flagship policy of providing new homes and school improvements by levering in funding through its high-value land and property portfolio. Claims of mismanagement will be a departure for the Tories, who have been broadly acquiescing in the strategy and have never called for it to be abandoned over its eight years in progress.

Cllr Cooper said that if the programme was delivering homes at the costs paid by Islington then Camden would have saved more than £130million.

He said the change in borrowing rules “could be a seismic shift in housing and will kickstart a council house-building revolution”, adding: “More than half of councils identify the housing debt cap as the top reason they’re not building more homes, and now they have no excuse.”

But he added: “These powers will be of use to councils that are well run and able to pay for their debts. Camden currently builds fewer homes at higher costs than any other London borough. It costs Camden 50 per cent more to build a council home than it costs Islington and twice as much as some other London boroughs.”

Conservative leader Oliver Cooper

Labour’s regeneration chief Councillor Danny Beales said at his party’s conference that as many as 5,000 potential new homes were held back by government rules on borrowing.

He said Mrs May’s announcement was a victory for councils like Camden which had run “Back us to build” campaigns. “While we haven’t seen the full details, we welcome the announcement,” he said.

But Cllr Beales will contest the Tory attack on the CIP, telling the New Journal last night: “We have a larger scale programme, delivering more council homes than many local authorities.

“This often has involved significant and complex estate regeneration. Our costs reflect the fact that we expect high-quality homes.” He said that the aim of “prioritising” larger homes for families on the waiting list drove up costs, adding: “We’ve learnt the lessons from the past when homes were built too quickly or cheaply.”

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