PM calls for “new generation of council houses” as extra £2bn made available

The Government will get “back into the business of building houses” with councils as well as housing associations encouraged to bid for an additional £2bn in affordable housing, Prime Minister Theresa May told the Conservative Party Conference in Manchester.

Elsewhere in the speech the PM also said:

• She had asked Professor Sir Simon Wessely to undertake an independent review of the Mental Health Act.
• An independent public advocate would be introduced for major disasters, to provide “the strong independent voice that victims need”.
• There would be an extension of the Free Schools programme with 100 built in every year of this Parliament.
• There would be a major review of university funding and student financing. “We will scrap the increase in fees that was due next year, and freeze the maximum rate while the review takes place. And we will increase the amount graduates can earn before they start repaying their fees to £25,000 - putting money back into the pockets of graduates with high levels of debt.” 

On housebuilding the PM said the extra funds would take the Government’s total affordable housing budget to almost £9bn.

May told delegates: “We will encourage councils as well as housing associations to bid for this money and provide certainty over future rent levels. And in those parts of the country where the need is greatest, allow homes to be built for social rent, well below market level.

“Getting government back into the business of building houses. A new generation of council houses to help fix our broken housing market. So whether you’re trying to buy your own home, renting privately and looking for more security, or have been waiting for years on a council list, help is on the way.”

Responding to the speech, Lord Porter, Chairman of the Local Government Association, said: “It is good that the Government has accepted our argument that councils must be part of the solution to our chronic housing shortage and able to resume their historic role as a major builder of affordable homes. We hope that today’s speech by the Prime Minister signals an important shift in the Government’s housing vision and are pleased that there will be additional funding for affordable homes.

“Councils are working with communities to approve nine in 10 planning applications but it is clear that only an increase of all types of housing – including those for affordable or social rent – will solve the housing crisis. A genuine renaissance in council housebuilding would increase housing supply, boost home ownership and reduce homelessness.”

Lord Porter added: “The last time the country was building more than 250,000 houses was in 1978 - when councils built 44% of new homes. Councils want to get on with the job of building the new homes that people in their areas desperately need.”

He called for councils to be given “genuine powers to invest in housing that meets the needs of communities in every town and city across the country”, adding: “This means the ability to borrow to invest in new council housing, to keep 100% of Right to Buy receipts to replace sold homes, certainty over future rents, powers to make sure developers build approved homes in a timely fashion, and adequately funded planning departments so that they can cover the cost of processing applications.”

Rob Beiley, partner at law firm Trowers & Hamlins, said: "Councils will welcome the Prime Minister's announcement about accessing funding for new housing and will be pleased that Government has recognised the key role that councils can play in delivering much needed new housing."

On mental health the Prime Minister said tackling the injustice and stigma associated with mental health was a particular priority. “So we are building on our record of giving mental and physical health parity in law by investing more in mental health than ever before. But there is widespread concern that the existing Mental Health legislation passed more three decades ago is leading to shortfalls in services and is open to misuse. Detention rates under the Mental Health Act are too high. And it is people from black and minority ethnic populations who are affected the most.”

The review by Professor Wessely of the Mental Health Act would “tackle the longstanding injustices of discrimination in our mental health system once and for all”, she claimed.