Future of council house system in danger - report

Five recommendations have been published by 20 council landlords in England

The future of England’s council house system is "in danger" a report done on behalf of Southwark Council has found.

The report said that an "unsustainable financial model" and "erratic national policy" has squeezed council budgets and sent costs soaring.

The report led by Southwark Council but jointly published with 19 of the largest council landlords in the UK is urging recommendations to the new government.

Minister for Housing, Jim McMahon, recognised that councils have "had to deal with very significant budget pressures".

Rose Grayston, an independent housing expert who compiled the report, said: "We're in a really difficult position, it's hard to exaggerate just how bad the council housing supply is.

"We're now at a point where the financing model for council homes is so bad, that councils are struggling to maintain what they've got, and now many councils are considering selling off homes, just to pay for repairs to others."

Southwark Council echoed Ms Grayston, saying that unless something is done soon, many council landlords would "struggle to maintain their existing homes adequately or meet the huge new demands to improve them, "let alone build new homes for social rent".

'Very significant budget pressures'

The report recommends:

• Reforming the housing revenue account (HRA), which is a council's ring-fenced funding pot

• A £644m one-off rescue injection

• A long-term rent and debt agreement, reforms to Right to Buy policies

• Removing red tape on existing funding

• A new Green and Decent Homes Programme and urgent restarts to stalled building projects.

But Labour's spending plans are limited, with debt needing to decrease and expenditure depending on the tax raised. The party has signalled that private investment will play a key role instead.

Councils in England are spending £1.7bn a year on temporary accommodation for homeless households, up 62% over the last five years, according to charity Shelter.

Reacting to the report's publication, Mr McMahon said: "Our councils do a wonderful job but they've had to deal with very significant budget pressures.

"Building 1.5 million new homes will deal with significant demand in temporary accommodation because people have a safe, secure, affordable place to live."

The London councils which helped develop the report are Camden, Greenwich, Islington, Hackney, Lambeth and Lewisham.