Scrapped borrowing cap 'will help councils meet housing delivery test' say officers

Plans to scrap limits on council borrowing will give planning authorities a boost in meeting housing delivery targets, according to local authority planning officers.

New housing: councils face delivery test under new NPPF
New housing: councils face delivery test under new NPPF

Speaking at the Conservative party conference this week, Prime Minister Theresa May announced that local authorities will be allowed to borrow against their housing stock in a bid to kickstart their housebuilding efforts.

Planning Officers Society president Paul Seddon described a mass council housebuilding programme as the closest thing to a "silver bullet" in helping meet national demand for housing.

"Planning officers were increasingly feeling the pressure of the housing delivery test and expectations that planning would be delivering, without having the tools required," he said.

Seddon said planners will be eagerly awaiting more detail on the policy, which some have predicted will be provided in the autumn budget, but he described the move as "a step towards a sensible policy".

However, Seddon added that some councils may take time to adapt to a development role and said there will be a need for some authorities to build up the skills required.

Matthew Spry, senior director at consultancy Lichfields, offered a similar assessment. "For councils to become developers it’s about more than money, it’s about finding the sites and developing the capacity to become developers again," he said.

"These things take time, as we have seen from the new council housing development companies, and the scale will initially be small."

Matthew Good, planning director at consultancy WYG, said local plan reviews may also be required for councils to identify sites that aren’t already earmarked for development by the private sector.

Otherwise, "we'd just be delivering the same numbers through a different funding stream," he said. "If we are truly in a plan-led process it should be dealt with through the local plan and you would be looking at plan reviews."

Simon Prescott, partner at consultancy Barton Willmore, suggested joint partnerships could provide a means of addressing any skills shortages while capitalising on councils’ access to both land and funding.

"Perhaps we could even see the private sector working with councils in joint ventures providing the skills that councils need to build - after all they have a lot of land owned and allocated for housing," he said.

David Van der Lande, delivery director at consultancy Iceni Projects, suggested a council housebuilding drive could lead some authorities to adopt a more flexible approach to section 106 negotiations.

"Local authorities now have the ability of meeting some of their affordable housing objectives without having to wait around for the development industry to deliver this through section 106 or other mechanisms," he said.


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