Councils renew call for urgent government action to end council housing funding crisis

At their respective full council meetings this week, both councils resolved to write to Deputy Prime Minister Angela Rayner and local Members of Parliament to reiterate the need for immediate changes to the broken financial model that dictates England’s council housing system.

Across the country, many councils are facing significant financial problems due to years of erratic national policy changes. In 2012, councils had to take out a loan to buy their own properties, creating a significant amount of debt to be self-financed through rental income. At the time, rents provided councils with enough money to start repaying the debt and continue investing.

However, the Government later restricted rent rises – a welcome measure for tenants, but there was no additional income for housing authorities to maintain investment.

By the 2023/24 financial year, in the case of Mid Suffolk, the district was faced with a £3.7m shortfall in its Housing Revenue Account (HRA), with the cabinet having to authorise the use of reserves this summer to fill that hole.

Both councils are already among more than 100 council landlords to sign up to a new report calling for the Government to take urgent action to restore lost income and unlock local authority capacity.

Cllr Richard Winch, Mid Suffolk District Council cabinet member for housing and property, said:

“This is a critical moment for council housing in this country. We have had to use reserves to fill the holes in our housing budget – and dozens of councils across England are having to make similar tough decisions to survive.

“We want to continue making progress to improve our services and meet the needs of our tenants, but working within this current financial system is simply not viable any longer.”

At the council meetings, both Babergh and Mid Suffolk also reiterated their commitment to working with partner councils to lobby the Government and encourage local housing associations to work more closely with their district council to increase the supply of affordable housing.

Cllr Jessie Carter, Babergh District Council cabinet member for housing, said:

“Council homes transform lives, providing a foundation for a good life for millions of people across the country who would otherwise be locked out of having a decent, affordable home.

“We want to be able to invest in desperately needed new properties, ensure repairs and maintenance services are robust, and make existing homes more efficient. We can’t do this without critical changes to the current policy, so we need the government to listen and help us to help our tenants.”