Reports of the chancellor’s plans to raise social rents above inflation to help bolster funding for affordable housing (“UK chancellor plans to raise social rents to boost affordable housebuilding”, Report, August 20) demonstrate the new government’s eagerness to find tangible solutions to the housing crisis.
However, it’s worth noting that fixing the budget and improving living conditions are not mutually exclusive. This move will have the greatest success if made in conjunction with additional steps towards ensuring
the economic viability of Britain’s social housing system in the short
and long term.
Councils have been left a harrowing legacy of homelessness and there is no quick fix. With statutory homelessness up by almost 20 per cent since 2022, any commitment to bridging this gap brings with it significant cost for councils and housing providers.
To fund these projects, we need to plug the gaps created by a broken system, starting with the shortfalls of housing benefit subsidies, which are leaving both councils and communities struggling to make ends meet.
A review of national policy on the housing benefit subsidy rate councils receive, which is still linked to 2011 rent levels, is urgently needed to bring about immediate savings.
In Sheffield, the 90 per cent housing benefit subsidy rules for temporary and supported accommodation led to a £5.9mn loss to the council in 2022-23. This is public money that could go back into housing.
Looking further ahead, just as the governments of Scotland and Wales have done, Key Cities (a network of UK local authority leaders) is calling for Right to Buy to undergo reforms to allow councils to retain receipts from sales so they can be combined with government grants and reinvested into new social homes.
Meanwhile, as outlined by the National Housing Federation earlier this year, implementing major social rent programmes will lead to increased and faster returns for councils over time — it’s a virtuous circle with benefits for not only council finances but also job creation.
If affordable housing is to be a pillar of Britain’s future, finding an equitable way to make social housing economically viable is the only way forward. This will guarantee that the government leaves a legacy of both social and economic improvement
for years to come.
Councillor Lorna Fielker
Deputy Chair of Key Cities
Leader, Southampton City Council
Labour Councillor for Swaythling Ward
Southampton, UK
