Southwark Council’s finance chief has thrown cold water on the government’s claim that it is tackling the housing crisis, after last week’s Autumn Budget speech.
Chancellor of the exchequer Philip Hammond’s budget included a policy that councils across the country could potentially borrow from a total share of £1bn, by 2021-22.
On Monday, Southwark’s cabinet member for finance, Fiona Colley, told the News: “Frankly that’s not enough to build the houses we need. What was announced in the chancellor’s speech and what came out in the detail was not quite the same thing.”
She said Southwark Council on its own already had plans to spend £1.3bn on council housing.
“And that’s without taking into account new pressures we have, like what we will spend on the Ledbury Estate, or on fire safety improvements like sprinklers,” Cllr Colley said.
“It costs us £250,000 to build a new house, and that’s not including what you might have to pay for the land value.”
The £1.3bn Southwark has already been budgeted for, and can be broken down into three main spending areas:
- £170m has been budgeted for upgrading kitchens and bathrooms in the borough’s council estates
- £800m for its Warmer Safer Drier programme
- £200m on building new council housing
Statements given by the council after the Grenfell tragedy suggested up to £100m would be needed to put sprinklers in all of the borough’s 174 tower blocks, which has not been budgeted for.
The chancellor’s policy follows a year of lobbying attempts from similarly cash-strapped London councils, and from senior Southwark councillors, for the government to lift restrictions on how much money councils are allowed to borrow and use for housing.
Cllr Colley added: “When you look at the £1.3bn we’re going to spend, actually a lot of that will come from our main sources of housing revenue, which is council rent, and money from Right to Buy purchases, and the sale of land assets – things like the Heygate Estate.
“But even with all of that money we are expecting a £211m shortfall.
“I completely agree with what John McDonell [shadow chancellor of the exchequer] has said. We need to invest in housing because it creates revenue, and it actually means we won’t have to spend on private-rented temporary accommodation and you will spend less on housing benefit.”
The News approached the Treasury about Southwark’s response, but they declined to comment.