The Conservative Party faces an existential crisis. For it to be the election-winning machine it has been for much of its existence, it must do one thing above all to win over the electorate — make the modern-day case for capitalism. A key component of this is ensuring that every individual has a physical stake in society, and I would argue that the easiest way of achieving this is through bricks and mortar and the creation of a new ‘property-owning democracy.’
The crisis I refer to above is encapsulated in the following single figure from the Office of National Statistics:
In 2016 just 34% of the adult population aged between 16-34 were owner occupiers[1]. By contrast, in 1995, property ownership for the same age group stood at 54%. So, the question for our party is this: do we move forward and build the new housing our communities and residents need, or do we risk alienating an entire generation of aspirant homeowners?
Research by the Adam Smith Institute in 2021, co-published by CT Local, indicated that a commitment from Government to build 2 million more decent homes, with the right infrastructure in place, could lead to 1.6 million people supporting the political party that delivers more housing.
As well as being the right thing to do, the reality is that the Conservative Party has always prospered electorally when it promotes a positive agenda on housing . In 1951, Winston Churchill triumphantly returned to Government on a manifesto of property ownership, and his administration fulfilled its pledge to the electorate to build 300,000 houses a year – a policy that was overseen by the future Prime Minister, Harold Macmillan. In 1980, it was of course Margaret Thatcher that introduced the ‘right to buy’, which increased property ownership by 12 per cent over just three years.
So, how do we meet our residents’ housing aspirations and get spades into the ground in the East of England? The answer is simple: provide councils with the freedoms and flexibilities they need to get on with the job. There needs to be a series of quick and easy wins to support councils in building the homes of the future.
Firstly, there needs to be a recognition of the fact that existing backlogs in the planning application determination process are a barrier to building new homes; planning fees, currently set by the Central Government, should be determined by individual local authorities. At present, these fees do not cover the true cost of processing applications. For example, in 2020/2021, 305 out of 343 planning departments operated in a deficit which cumulatively totalled £245 million.
Council planning departments also continue to experience recruitment and retention problems due to competition from the private sector. Giving councils the ability to set their planning fees locally would result in the sector being able to compete more effectively on terms and conditions to the benefit of local residents.
Whilst the Eastern Powerhouse welcomed recent changes that allow councils to charge increased fees on major applications in exchange for an accelerated decision-making process, we do fear that this will exclude local construction firms across the eastern region who are responsible for smaller scale development. Developers, whatever their size, are key to tackling the housing shortage. Fully devolving the power to set planning fees to local authorities will speed up the decision-making process for all applications and turbocharge the effort to build more housing without costing the Treasury anything.
We know that social housing provides families with a secure environment to live in and can act as a bridge to home ownership. Of course, building new social housing also helps to reduce the overall housing shortage and addresses the homelessness surge we are currently sadly seeing.
Research from the LGA indicates that for every £1 that is invested in social housing, £2.84 is returned to the wider economy. Likewise, for every social home built, the Government can save £780 in housing benefit.
To support councils across the eastern region in building more social homes, the Government could deliver two very quick changes. Firstly, councils could and should retain 100% of their right to buy receipts to build social homes to replace those where people have taken the right steps to home ownership. These right-to-buy receipts staying with councils would be a real boost to the ambition of councils to build more social housing and reduce the use of temporary accommodation.
In addition, local authorities also need the long-term financial sustainability of their Housing Revenue Accounts (HRAs). For this reason, we are calling on the Government to allow social housing rents to be set directly by local authorities rather than centrally. Again, this would be at zero cost to the Treasury but would ensure that HRAs have the long-term certainty necessary to deliver more social homes. With this power councils would also be truly accountable to tenants for their management of social housing.
To tackle the national housing shortage and create the next generation of homeowners, we need to recognise that it is Local Government that can and will deliver sustainable housing in communities across our country. As a longstanding councillor and party activist who has knocked on thousands of doors over the years, I know that most people don’t fear new housing per se, but rather development that is not well designed and which does not come with the necessary infrastructure that is needed to support the additional demand on public services.
Ahead of the general election, The Eastern Powerhouse calls on the Government to deliver these three quick and easy wins, which will boost housing growth and help the next generation of homeowners. In so doing, we will make the contemporary case for capitalism and secure the next generation of Conservative voters.