Southwark (Parliament Politics Magazine) – Southwark council research reveals 76 councils, managing 870,000 homes, face budget crises, threatening plans for a council housing revolution.
According to Southwark Council‘s research, council housing in the borough and throughout England is confronted with urgent issues.
The report says that there is a dire requirement for deliberate initiatives to increase housing supply and guarantee that underprivileged people have access to secure and affordable houses, as a substantial number of councils report financial difficulty.
Sustainable solutions that tackle both short-term demands and long-term housing issues are the main focus of ongoing policy reform debates.
Two-thirds of the 76 councils that oversee more than 870,000 houses, according to a survey, stated that their allocated budgets are in danger of not being able to balance their budgets by the end of the decade.
According to the study, commissioned by Southwark Council, 93% of councils’ housing budgets are under financial strain, and these councils are either taking or plan to take “substantial action,” which may include using emergency funds.
A survey of councils, collectively managing over 870,000 council homes, has shown that council housing finances are on the brink. The government's upcoming housing strategy needs to #SaveCouncilHousing
— Southwark Council (@lb_southwark) January 20, 2025
See the full results and our recommendationshttps://t.co/Kewyp8sfe8 pic.twitter.com/qRSjxWSdtU
How are budget constraints impacting council housing projects?
More than a third of councils have reduced the maintenance and repairs of council homes, and 61% of councils have already canceled, stopped, or postponed homebuilding projects.
Approximately 71% of the people surveyed stated that they intend to abandon, pause, or delay ongoing council housing projects, and 68% are getting ready to scale back their commitments to rebuild or construct new properties.
Furthermore, 28% of councils stated that they would probably sell council homes in an effort to achieve financial stability, and 67% acknowledged that there is a strong chance they won’t be able to create a balanced budget by 2029 given the current situation.
Can Labour’s housing plan address council challenges?
One of the primary elements of Labour’s commitment to build 1.5 million new houses is increasing the availability of council and social housing.
The aim is a personal mission, according to Deputy Prime Minister Angela Rayner, who told social housing officials that she has “skin in the game.”
“I haven’t got to where I am today in spite of coming from a council house, but because of it,” she added.
Ms. Rayner, who is also the Housing Secretary, stated that the government would release a long-term housing policy.
Despite the Government recently cutting the right to buy discounts and introducing a new social rent settlement, the study indicated the severity of a crisis alleged to be created by councils’ housing-related incomes being constrained, mounting expenses, and numerous policy changes since 2010.
Kieron Williams, Southwark’s Labour leader, said: “The Government’s ambition to build 1.5 million new homes is critical to ending the housing crisis and council housing must play a central role in this effort.
“However, without significant further action councils will be unable to build at scale and unable to bring existing homes up to green and decent standards fit for the future.”
How Government funding will resolve council housing shortage?
In order to stabilise their housing budgets and avoid postponing canceling investments in new houses, 100 councils, including Southwark, requested an emergency £644 million infusion from the government last year.
With a £2.2 billion “black hole” in councils’ allocated budgets anticipated by 2028, they cautioned that the financial approach for local housing financing is “broken.”
A “sustainable” self-financing agreement that addresses “unsustainable debt” was demanded by the authorities jointly.
They also emphasized the necessity of funding for new council houses that reflect the associated costs as well as a long-term capital investment to update the stock of social housing.
Mr Williams added: “The Government’s fast implementation of many of our report’s recommendations – including Right to Buy reforms and a new social rent settlement – gives us hope for the future of council housing.
“Like many councils, we have had to pause our ambitious home-building program on a number of sites and our Housing Revenue Account is now under intense strain.
A Ministry of Housing, Communities, and Local Government spokesperson said: “The upcoming Government housing strategy presents a major opportunity to give council landlords the headroom and the confidence to invest in the homes our country needs – addressing the scourge of homelessness and unlocking growth, jobs, and security across the country.”
“This Government will deliver 1.5 million homes as part of our Plan for Change including the biggest social housing boost in a generation, and we will work with councils to achieve this.
“We know that the local government has suffered from years of short-term decisions, which is why we have already set out important steps to help them deliver the homes we need.
“That includes overdue reforms to the Right to Buy scheme and an extra £500 million for the Affordable Homes Programme, and we will soon set out further measures.”
At a period when demand was increasing, the share of accessible or social rent housing in England fell from about 20% in 2000 to 16% in 2023.
As part of its Plan for Change, the government released a new National Planning Policy Framework that grants councils the authority to construct more social houses.
With an additional £500 million committed in the Affordable Homes Programme, the goal is to provide “the biggest increase in social and affordable housing in a generation.”
How will Southwark council tackle its growing housing crisis?
Recent Southwark Council research uncovered serious issues in the council housing sector, highlighting the borough’s pressing need for affordable housing. The results, as of January 2025, provide important new information about the housing crisis that Southwark and other comparable London neighborhoods are facing.
There is an urgent need for affordable housing in Southwark; estimates suggest that 2,932 new homes would be needed each year to meet demand. Over a ten-year period, the borough aims to deliver 23,550 properties, or roughly 2,355 homes annually.
With an immediate target of 2,500 homes by 2022, the council plans to provide 11,000 new council homes by 2043. Only 654 homes have been delivered at present, and there are still many more in various planning and building phases, indicating that progress has been slow.
According to the research by Southwark council, homelessness and dependency on temporary housing have increased as a result of the shortage of affordable housing. Over 109,000 households across the UK are now living in temporary settings due to lack of permanent housing options.
The development of new residences has not kept up with demand, despite efforts to enhance the supply of housing. Councils’ continued financial strains make it difficult for them to successfully start and finish new housing projects.