Feature Story

A radical rebuild

Making sure that the private sector is accountable to local people and meeting local demand is key, believes the Liberal Democrats' Shadow Housing Minister Sarah Teather.

Whichever party is in power after the next election, the Liberal Democrats' Sarah Teather insists a change of tack is needed to address the key challenges in Britain's social housing sector, as she explains to The PPP Journal.

How will your party tackle the issue of social housing and the need for more affordable homes, should you be in power after the general election?
It is a scandal that this government has left 1.7 m families languishing on housing waiting lists. The implications of this failure are huge: health inequality, low educational achievement and even marital breakdown can often be attributed to a family's poor housing situation.

For years local councils have been unable to build because the Housing Revenue Account (HRA) meant that all their rent takings and receipts from right-to-buy went straight to the Treasury. The government has finally recognised the need to reform the HRA, but reform will be pointless unless it leaves local councils with the power to go to the markets to borrow to build.

We also need direct government investment in house building, and to make better use of the thousands of homes across the country that sit empty. A focus on bringing empty property back into use could make a real dent in the waiting list.

How do you propose to maintain the high levels of new build housing necessary, as well as providing a framework to regenerate poorer social housing stock?
The government has offered voters a false choice between new homes or better homes; the fact is that we need both. Almost one in every five social homes in England are still not up to Decent Homes Standards, yet the government reaction has been to snatch money away so they can win some headlines on new building.

We have spoken out against the raid on Decent Homes, and are also committed to cutting VAT on renovation and rebuild so that it is easier to regenerate existing properties. This regeneration doesn't always have to fall to the state; there are thousands of long-term empty state and council homes that could be offered cheaply to first-time buyers willing to put in the work to bring them up to scratch. A scheme like this could see the regeneration of whole streets in decline, particularly on the edges of pathfinder areas. The new owner gets an affordable property and the community benefits from increasing property prices and residents who have really invested in their local area.

Has the credit crunch and the expected tightening of the public sector's purse strings made the possibility of social housing PPPs more or less likely?
Less likely, unfortunately. The credit crunch has definitely undermined the ability of the private sector to build, with sources of private finance drying up.

That's why we need to think imaginatively and consider new ways of delivering social housing: tax incentives to convert empty property; local housing bonds for investment in infrastructure; housing for self-starters; and short-life housing aimed at the young and economically active.

Sadly, the current economic climate means that there is no one magic solution and different local areas will need to look at different ways of doing things.

Can the processes surrounding PPPs, primarily the length and expense of the bidding process, be simplified to assist private companies wishing to have involvement in social housing PPPs?
The bidding process can be complicated and alienating, but, ultimately, the number one priority has to be making sure that the private sector is accountable to local people and meeting local demand.

It is now widely accepted that the traditional method of paying for social housing and infrastructure – Section 106 contributions – is failing. One alternative may be for a local authority or housing association to collaborate with a building society to issue a Local Housing Bond. The bond could be used to raise finance upfront for the infrastructure and affordable housing required. Investors will be paid back using the revenue from a ‘roof tax' once the private properties are built and sold.

It is a form of safe ethical investment for local investors, allowing them to invest in the development of their community, without the risk of losing their money.

These are the kind of radical solutions that we need to urgently consider if we are to rebuild Britain's housing stock.


Sarah Teather MP
Shadow Housing Minister
Liberal Democrats