A group of influential organisations, including the Local Government Association, the Chartered Institute of Housing and the National Housing Federation, have renewed their calls for Westminster to lift local authority borrowing caps.
In a letter to the Financial Times, the group, which also includes London Councils, the British Property Federation, and the National Federation of Arm’s-Length Management Organisations, calls the cap an ‘artificial limit on council borrowing’ and urges the government to remove it.
An amendment to the Growth and Infrastructure Bill proposing the removal of the debt cap will be discussed in the House of Lords later today.
The letter re-states research carried out by the CIH and LGA that showed that councils could build up to 60,000 new affordable homes if the cap were lifted.
It continues: ‘Removing this cap is a prudent and sensible move to help kick-start the economy, bring local and national construction growth and address the UK’s housing crisis.’
Both the CIH and the NHF have called on the chancellor to remove the cap as part of next week’s budget.
As Inside Housing revealed last week, councils have used the self-financing reforms that came into effect last year to develop plans for 25,000 new homes. But this figure could be more than doubled if they were allowed to borrow beyond their current limits.