Latest Public Sector News


Extra housing revenue funds open for council bids

Councils now have the opportunity to bid for a share of £300m in extra borrowing, which will be made available through an increase in their housing revenue account borrowing cap, to enable them to build up to 10,000 affordable homes. 

The additional borrowing headroom was first revealed in last year’s Autumn Statement, and the pot will be split into £150m in both 2015/16 and 2016/17. 

Communities secretary Eric Pickles said: “We have untied the hands of councils so they can take more responsibility for housing in their area. Councils have built more homes in the last three years than under the whole of the last government – 170,000 affordable homes have been delivered since 2010, and house building is now at its highest level since 2007. 

“We are now offering extra borrowing powers so councils can build more homes. We are also making it easier for councils to sell surplus and redundant property for new affordable housing, and they should consider what land they can release for the benefit of their local community.” 

Councils applying for extra borrowing powers will need to demonstrate maximum value for money, by including funds from disposal of surplus assets, particularly high-value vacant stock, and by bringing forward their own land for new affordable housing. They will also need to work closely with their Local Enterprise Partnership (LEP) when preparing their bids for extra borrowing powers, which will form part of the government’s Local Growth Fund. 

In the prospectus for how councils can bid, it was stated that “Local authorities should seek to reduce the amount of public sector borrowing needed to finance new supply wherever possible”. 

Therefore, where additional housing revenue account borrowing is requested and in order to meet the government’s aim of 10,000 new affordable homes, the DCLG and Treasury will be looking to support local authority schemes that maximise the following sources of funding: 

  • Bringing forward their own land for scheme development as a mechanism to reduce costs of the proposed housing;
  • Receipts generated through the disposal of existing stock, and, in particular, high value vacant stock;
  • Other sources of cross subsidy, including surpluses from existing stock and activities and income; and
  • Other sources of funding or means of reducing the costs such as free or discounted public land (in addition to local authority land) and other contributions such as from the New Homes Bonus or Section 106 commuted sums. 

The funding for local authorities who make successful bids for the additional borrowing will receive a new indebtedness determination to provide for additional housing revenue account borrowing (up to the agreed amount) which the authority undertook to finance capital expenditure on approved schemes during 2015/16 and/or 2016/17. 

Chief secretary to the Treasury Danny Alexander said: “I am determined that we do even more to empower local communities to deliver more good quality housing now.  The government recently launched a review into the role local authorities can play in supporting new housing supply, led by Cllr Keith House and Natalie Elphicke.” 

Cllr Elphicke and House are investigating whether councils are using their current powers and flexibilities to deliver new housing, and how they could team up with housing associations, house builders, residents and businesses to do more. 

Last week they made their first call for evidence, and asked for ideas, evidence and case studies from a wide audience so they can consider new approaches to increase house building, identify barriers and challenge ‘myths’ that may stand in the way of housing developments. 

Alexander added: “This additional borrowing flexibility, together with funding from the sales of high value social homes and other forms of local investment will deliver 10,000 new affordable housing over the next few years – supporting the construction sector and providing new homes.” 

The new funding programme is a national one and includes the London boroughs. The deadline for bids, including Expressions of Interest, is 16 June 2014. All bids must be agreed by a council’s LEP before submission to the secretary of state. 

(Image courtesy of Lydia) 

Tell us what you think – have your say below or email


There are no comments. Why not be the first?

Add your comment



public sector executive tv

more videos >

last word

The importance of openness after Grenfell

The importance of openness after Grenfell

Following the recent Grenfell Tower tragedy, Lord Porter, chairman of the LGA, argues that if the public are going to have faith in the safety testing process then everything must be out in the open more > more last word articles >

public sector focus

View all News


Peter Kyle MP: It’s time to say thank you this Public Service Day

21/06/2019Peter Kyle MP: It’s time to say thank you this Public Service Day

Taking time to say thank you is one of the hidden pillars of a society. Bei... more >
How community-led initiatives can help save the housing shortage

19/06/2019How community-led initiatives can help save the housing shortage

Tom Chance, director at the National Community Land Trust Network, argues t... more >


Digital innovation in the public sector: The future is now

17/12/2018Digital innovation in the public sector: The future is now

One of the public sector’s key technology partners has recently welco... more >

the raven's daily blog

New rules to change the future of Social Value

05/06/2019New rules to change the future of Social Value

The government has announced the introduction of new rules to change the future of social value and make the way housing developers stump up the money for infrastructure both ... more >
read more blog posts from 'the raven' >

editor's comment

25/10/2017Take a moment to celebrate

Devolution, restructuring and widespread service reform: from a journalist’s perspective, it’s never been a more exciting time to report on the public sector. That’s why I could not be more thrilled to be taking over the reins at PSE at this key juncture. There could not be a feature that more perfectly encapsulates this feeling of imminent change than the article James Palmer, mayor of Cambridgeshire and Peterborough, has penned for us on p28. In it, he highlights... read more >