My view on the needs for Government-funded social housing

Colchester MP Will Quince writes about the needs for Government-funded social housing in the Daily Gazette

It is clear a radical solution is needed to address our housing shortage, let us embark upon the greatest programme of public house-building since the Second World War.  Government used to build homes directly, to prevent a housing crisis from developing.

In the decades from Churchill to Thatcher, almost 4.5 million council homes were built in England through local authorities and housing associations, making public house building twice as productive as the private sector for decades.  During this period, every single administration built over 100,000 council homes annually, read that again. 100,000 homes, per year.  Unfortunately, by 2009, 12 years of Labour government had brought this figure down to a disastrous 360 houses built per year, it is worth emphasising those figures.

From 1997 to 2010, over 13 years, Labour only built 2,820 council homes.  From 2015 to 2018, in three years, the Government has built 5,480 council homes.

In essence, public house building stalled under 12 years of Labour, as our local authorities delivered less than 1 per cent of the homes they were in 1979. Is it any wonder that we now have a housing shortage?  Recent Conservative governments have revived local authority construction levels, and recently lifted financial restraints on local authorities in order to allow more to be built.  Yet this falls massively short of our historic achievements, and our current needs.  Some say the private sector will pick up the slack, the private sector has not - and never will - rise to meet demand, or solve homelessness, because those at risk of homelessness cannot afford their own home.  Those most affected by a lack of council housing are not in a financial position to purchase private homes.  Demand in the private sector is not a measure of how many people need homes; it is a measure of how many people can afford to buy them.

With fewer homes being built by the private sector, and a stagnant supply of public housing for those on lower incomes, is it any wonder that we face a housing crisis?  In England, there are 1.15 million households waiting for a council home, and 277,000 people are officially registered as homeless.  I know this because I have led the Homelessness All Party Parliamentary Group since my election in 2015, and it has always been to clear to me a radical solution is needed to address our housing shortage.  I believe we should once more use the full power of government to invest in the delivery of housing directly.  Some might argue that government can no longer afford to build homes. I would argue that to do nothing would almost certainly cost us more in the long run.  The Office for Budget Responsibility has estimated in 2018/19 the total housing benefit bill is likely to hit an incredible £23.4 billion.  We will soon be spending more on housing benefits than we do on secondary schools.

This worrying figure is only going to increase. The Chartered Institute of Housing has estimated that only 4.3 per cent of government spending on housing in 2015/16 went towards measures to boost new housing supply, with the remaining 95. per cent going on housing benefit and mortgage interest – factors which do absolutely nothing to rectify our worrying lack of public housing.  In short, more than £20 billion of taxpayers’ money is being spent annually to mitigate the effects of a housing shortage, without finding a long term solution.  We need to encourage the creation of new homes.

So where does all this money go?

Due to a lack of social housing, those who need homes must be housed in the private rented sector.  Taxpayers’ money is therefore transferred into the pockets of private landlords, which only increases demand in the private rented sector, drives rents up for everyone, and ultimately houses vulnerable people, often with no income, in inappropriate accommodation where they have no support.  This is wrong. No Government should be held ransom by the costs of the local private rented sector.  Investing in the supply of social housing is a far more efficient use of public money.  Once built, these social homes would be public assets that would appreciate in value, in addition to providing an immediate financial return through a reduced housing benefit bill.

It is common sense; to solve homelessness, we must build homes.

Expanding social housing supply would also alleviate pressure upon our overstretched and overpriced private rental sector, ensuring the benefit is not only felt by those who gain a social home, but also by those privately renting.  A decrease in demand would lead to cheaper rents.  The wider economic benefits are considerable, as every £1 invested in construction returns £2.84 to the economy, a higher multiplier than many other forms of government investment.  Social house building also has the advantage of being counter cyclical, unlike building in the private sector.

It would help to insulate construction businesses from a future economic crisis, a consideration that is particularly valuable to small and medium size builders and suppliers who are the hardest hit in an economic downturn.  We all want an affordable private rented sector, a sustainable benefits system, and for those in need to have access to a secure home.  One of the main barriers to this is our shortage of social housing and I would call on the Government to adopt the vision and ambition of our predecessors and embark upon the greatest programme of home construction since the Second World War.

To that end, I have met with the Housing Minister to present my case.