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11. What support her Department is providing to councils to help them use their housing revenue account to build council houses.
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13. What assessment she has made of the potential impact of housing revenue account debt on the ability of local authorities to maintain and increase council housing stock.
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We recognise that many councils are facing significant financial pressure on their HRAs. The Government have already taken a number of steps to rebuild the capacity of councils to borrow and invest in new and existing homes, including fundamental reform of the right to buy scheme, a 10-year social housing rent settlement and social rent convergence. We will continue to explore further ways in which we might support councils to expand their stock of social homes, including low-cost borrowing options.
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This Government have committed to council housing and taken steps to boost it, which is fantastic. Cornwall council’s housing revenue account has struggled to build because it has had to invest in repairs, meaning that it has had to reduce the amount of funds available annually for new homes. Of course, another of the barriers to delivering new council homes is debt; over £90 million of it is the result of self-financing arrangements dating back to 2012. If that debt were reduced, Cornwall council and others could do more. Will the Government consider options to write off HRA debt, or at least provide lower-cost financing such as that made available to registered providers through the National Housing Bank?
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As I made clear, we have already acted to build capacity in the sector, and will continue to explore further ways in which we might increase the headroom available to councils and housing associations, not least through low-cost borrowing options. With regard to the HRA, we remain of the view that the principle of self-financing is the right foundation, but as I said, we are fully aware of the impact of HRA debt on many councils’ ability to build more and will continue to explore ways in which we might further support them.
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My right hon. Friend is aware of the challenges with housing in my constituency and across London. Every home built that provides a foundation for people’s lives saves the state money as well, given the temporary accommodation costs that are saved when people are able to get that foundation in life. Will my right hon. Friend undertake to talk to Treasury colleagues about how to look at those maths, to make sure we understand that tackling issues with debt can save money in the long term? I recognise that it might be a long haul, but will he promise to start?
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My hon. Friend is absolutely right about the importance of building more homes in London—I am acutely aware of the housing delivery challenges that the capital is facing. It is really important that a big proportion of those homes are social rented homes and council-delivered social rented homes. I am really pleased that in the early years of the social and affordable homes programme, 30% of the funding will go to London. That will allow London to deliver at least £6 billion of initial allocations, over half of which will be for council housing. However, there is more we need to do in this area, and I am more than happy to have a discussion with my hon. Friend outside the Chamber about what that is.
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Councils such as Dorset sold their housing stock many years ago. Their social housing is entirely operated by housing associations; they therefore have no HRA, making it more expensive and complex to influence the social housing network in their areas and support constituents living in poor-quality, overcrowded social homes. What additional measures are being considered to make sure we do not end up with a two-tier system between those with an HRA and those without?
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We have made changes to help more councils access an HRA, raising the threshold from 200 homes to 1,000 homes to provide support in that area. Over time, we want to see a deeper partnership and more working between councils and local authorities, but we are giving consideration to what more we can do to ensure there is sufficient public control of private registered providers in an area to meet housing need. We may discuss this issue further on Second Reading of the Social Housing Bill on Thursday.
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The average house price in my constituency is 12 times average household incomes, so the desperate need for more social housing is plain for everyone to see. Westmorland and Furness Council does now have a housing revenue account, inherited from the previous Barrow borough council, but it is unlikely to spend any of that money—unlikely to build council houses—while the right to buy remains unfettered. If council houses are built in the lakes and the dales, they will be sold, and they will become Airbnbs and second homes before the year is out. What will the Government do to encourage the likes of my local authority to build with confidence that people can have affordable homes that they can guarantee will remain so?
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As the hon. Gentleman is hopefully aware, we have already taken action to reduce maximum right-to-buy cash discounts. Through the Social Housing Bill—as I mentioned, it has its Second Reading on Thursday—we are taking further action to increase eligibility and banning the right to buy on new build social homes for 35 years. I hope he can get behind that Bill on Thursday and support it.