Last year, a survey of Solace members that we conducted in association with Inside Housing found that 1 in 4 respondents had set up a wholly-owned company and almost 1 in 5 had set up other types of joint venture, such as Community Benefit Society or a joint venture with a Housing Association in the past year. The main reasons they gave for setting up Local housing companies and other delivery vehicles were to increase supply of affordable housing and address lack of housing development in the area, as well as to promote home ownership and bridge the gaps in the housing market not filled by developers.
A number of respondents also noted that their reasons for setting up a company were to generate additional income and maximize return to the Local Authority. Respondents noted they had set up companies to build private rented sector housing and deliver market housing, as well as to assist the Authority to deliver commercial services, give them flexibility to build more homes alongside their Council houses, and deliver mixed tenure housing with the SME sector.
There is much good practice across local government, with Bournemouth, Birmingham Wokingham, and Croydon just some examples of established housing delivery and innovation. But I also believe that we need to up our game to translate this good practice across local Government. We can’t shy away from capacity and skills issues. There is also duplication paying for legal advice to set up delivery vehicles and companies that could be more effectively commissioned. There are potential leadership issues with senior level posts dedicated to housing reduced. That is why we are in discussions with the Homes and Communities Agency about joint work later this year to look at how we harness good practice to build capacity across the sector.
I’m also going to propose something that some in local government may find a bit provocative: surely too the time is also ripe for more ambitious collaboration between councils and housing associations at national and local levels, building on some pioneering partnerships that exist across the country?
I believe that the National Housing Federation understands and has a desire to do more with our sector at national and local levels, notwithstanding the tensions that emerged as a result of the Right-to-Buy deal that their members signed up to. Perhaps rather than being pitted against each other in bidding for the £2 billion for social and affordable housing that the Prime Minister announced this week, this is an opportunity for us to explore jointly how we get best value from that funding for the benefit of our residents. At a minimum, we should be jointly pushing for maximum local flexibility in how the funds can be used.
But I believe that we could go much further than that and make the case for future investment for social housing that is at least as significant as the extra £10 billion just made available to private developers through Help to Buy.