The Mayor of London, Sadiq Khan, is launching a new £10m Homebuilding Capacity Fund to beef up London councils’ housing and planning teams — decimated by government cuts — and help boost their role building new homes in the capital.
Over the last eight years, central government cuts have seen council budgets for planning and development fall by 50% in London. This has held back housing growth, and particularly plans to build new council homes.
Sadiq’s new Homebuilding Capacity Fund will allow councils to bid for up to £750,000 each to boost their housing and planning teams. This could include hiring new staff to lead council homebuilding projects and develop new masterplans.
Bids will be considered that help to deliver:
- A new generation of council homes;
- More homes, including social rented and other genuinely affordable homes, on small sites;
- Proactive masterplans in areas with significant growth potential; and
- Optimal density across new residential developments in an area.
The Homebuilding Capacity Fund will work alongside other practical support that City Hall is providing to help councils build again. Earlier this week, Deputy Mayor for Housing James Murray launched a new Council-Led Housing Forum, run by Future of London, to provide technical advice to practitioners involved in council-led delivery of homes.
This support will help councils deliver their successful bids to the Mayor’s Building Council Homes for Londoners programme — the first-ever City Hall programme dedicated specifically to supporting council homebuilding.
The programme, launched in May this year, set out to help get 10,000 new council homes underway over the next four years. Bidding closed on September 30th, and initial allocations will be announced soon.
The Mayor of London, Sadiq Khan, said: “London’s housing crisis has been decades in the making and there is no easy solution — but we will only make progress if councils can take a lead in getting new homes built.
“In the 1970s London councils were supported by central government and built more than 20,000 homes a year. However, these councils built only 2,500 homes over the last seven years, including 700 that were completed last year.
“Despite wanting to do far more, councils have been hamstrung by swingeing cuts from Government for far too long. My new Homebuilding Capacity Fund won’t reverse those cuts — but it will help ambitious councils to enhance their capacity to deliver large-scale new-build programmes.
“I am able to do this thanks to the business rates devolution deal between the capital and central Government — giving us more control to spend more money on the things that matter most to Londoners.”
Cllr Darren Rodwell, London Councils’ Executive Member for Housing and Planning, said: “Boroughs are determined to help tackle the housing crisis by building a new generation of council houses for Londoners. Local government once led the way in housebuilding, but for too long we’ve been held back by unfair restrictions and underfunding imposed by central government. There is now growing recognition this needs to change.
“This support from the Mayor will help boost boroughs’ ability to deliver the homes our communities need. It’s a welcome development and boroughs will be keen to make good use of these much-needed resources.”
Nicola Mathers, Deputy CEO, Future of London, added: “The combination of Future of London’s Council-led Housing Forum, bringing local authorities together to share knowledge, the Mayor’s Homebuilding Capacity Fund to grow individual borough teams and the removal of the borrowing cap creates a huge opportunity to boost housing delivery. Following years of cuts, this is the catalyst to enable councils to realise their ambition.”
The Homebuilding Capacity Fund is being funded through the Business Rates Retention Pilot announced at last years’ Autumn Budget.
This sees the capital retain 100% of any increase in business rate receipts above the Government’s baseline during the financial year 2018/2019.