Latest Public Sector News

14.10.16

South East councils ‘losing £98m a year on unbuilt houses’

Councils need more power over house building, South East England Councils (SEEC) has said as it revealed that it has lost £98m in council tax income due to houses not being built.

In 2014-15, the South East had the highest number of additions to its housing stock of any region in England, with 28,360 new homes built.

However, in its submission to the Autumn Statement, the SEEC said that 66,751 homes have received planning permission but have not yet been built, costing the region £98m a year in lost council tax.

Cllr Nicholas Heslop, chair of the SEEC, said: “This could have helped councils to avoid making some of the tough choices on funding services that we face.”

Unpaid planning permissions in the south east have grown by 12,000 since 2009-10. The region also faces a particular shortage of affordable housing, with just 4,850 built in 2014-15.

The SEEC said councils should have new powers to encourage stalled building works to go ahead. In addition, it said the government should revisit rules on exempted sites and allow councils to determine locally-appropriate developer contributions from all sites.

The LGA said recently that a ‘renaissance’ in council housebuilding is the only way to meet the growing demand, with up to 5.4 million people thought to be in need of affordable housing by 2024.

The SEEC also said it would need investment to support areas including infrastructure, increasing broadband roll-out and reducing unemployment and should not lose out on funding as a consequence of the UK’s exit from the EU.

Roy Perry, deputy chair of the SEEC, said: “Over the 10 years to 2012 the south east paid £80bn more in taxes than it received in government funding and this surplus finances public spending UK-wide.

“We fully support raising economic performance in other parts of the country but this must happen alongside continued investment in south east success. The south east’s excellent return on investment and its ability to fund public spending nationwide – now and post Brexit – will suffer if its economy is starved of investment.”

The SEEC said it welcomed the proposed devolution of business rates, but wanted to avoid “significant upheaval” which would “deliver little real change” in the income councils receive.

It also said that local authorities should be allowed to access a proportion of stamp duty and keep a guaranteed percentage of council tax growth, and the New Homes Bonus should be preserved in the long term to reward councils for supporting housebuilding.

The SEEC also said a review of social care funding and a greater role for councils in sustainability and transformation plans (STPs) is needed.

The south east’s ageing population is contributing to pressures on social care. It currently has 790,000 residents aged over-75 and this is expected to increase to over 1.5 million by 2039.

The south east also hosts a high proportion of asylum seekers. The SEEC said that the National Transfer Scheme for Unaccompanied Asylum Seeking Children should be expanded to cover asylum seeker children when they become care leavers.

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