Council housing is back at the centre of national housing policy. But while a more supportive funding and policy environment presents a major opportunity, councils still need credible pipelines, strong governance, trusted partners, and increased capacity if such renewed political ambition is to translate into homes. This article explores the new funding landscape, the differing starting points of councils, ongoing challenges of viability, and turning opportunity into delivery.
A new funding landscape
Under Prime Minister Andy Burnham, ministers have called for council homes to be built on a scale not seen in decades, backed by the 10-year, £39 billion Social and Affordable Homes Programme (SAHP). The first major allocations underline that ambition, with £10 billion allocated to 33 Strategic Partners.
Significantly, these include Cambridge City Council, Eastleigh Borough Council and Newcastle City Council – each of which secured their place at the expense of some larger housing associations with strong track records in development – signalling that councils can once again become long-term delivery partners at scale. Meanwhile at the time of writing, details of the Greater London Authority’s programme remain under wraps, but with suggestions of a strong balance towards the capital’s local authorities.
For authorities outside the initial Strategic Partnerships, the Continuous Market Engagement route provides another means of bringing forward eligible schemes, while the wider programme supports direct council delivery and partnerships. This flexibility is important because councils are starting from very different positions, with differing pipelines, resources and capacity to translate the new funding environment into delivery.
Different starting points
Some councils already have established development programmes, experienced teams and well-defined pipelines, typically underpinned by a Housing Revenue Account and often through a wholly owned development company. Others are rebuilding capacity after decades in which their direct development role was limited or non-existent.
The best response will vary from area-to-area. For mature council developers, the opportunity may be to accelerate their existing programme, secure longer-term funding, review their current delivery model, and ensure a closer alignment between delivery and need (particularly for larger family-sized homes). Elsewhere, the immediate priority may be to assemble a credible pipeline, build programme management, unlock sites, or establish more effective partnerships with registered providers and developers.
In our experience this often points towards a portfolio approach rather than a single preferred model. While direct delivery may be right for selected sites, other models such as development partnerships, or joint ventures sites may provide better options elsewhere. Councils should start with the housing outcome they wish to achieve and then select the delivery route that best fits the site, market and operating context.
The viability challenge
The new funding programme is substantial but grant alone will not make every scheme viable. Construction costs, site remediation, infrastructure, land assembly and weak market values can all prevent promising sites from delivering homes. Council landlords also face competing demands on their financial capacity, including needs for investment in existing homes, building safety, decarbonisation and regulatory requirements.
Councils keen to develop need to understand which sites respond most effectively to local housing needs, what subsidy they require, whether the proposed tenure mix is viable, who is best placed to deliver them, and how financial and development risks will be managed.
Successful programmes also depend on strong cross-council working. Teams from across housing, planning, regeneration, finance, property, procurement and legal need to work towards shared priorities. Elected members need to set a clear vision and provide strategic oversight. Senior leadership must be able to make timely decisions, while governance arrangements need to provide assurance without creating avoidable delay.
From opportunity to delivery
The renewed emphasis on council housebuilding inevitably invites comparisons with the post-war period, when council’s last played a central role in delivering new homes at scale. Today’s circumstances are very different, and there is no simple return to that model, but the underlying principle of councils taking a more active role in shaping and delivering the homes their communities need has renewed relevance and clearly resonates with the public.
For councils, the challenge is to turn that ambition into a programme that is realistic and sustainable.
For councils, the challenge is to turn that ambition into a programme that is realistic and sustainable. That means understanding what can be delivered, where and by who, and putting in place the pipeline, investment, skills, partnerships and governance needed to make it happen. The answer will look different in different places. Some councils will be well positioned to expand direct development, while others may achieve more through acquisitions, partnerships, unlocking land or building their capacity over time.
Navigating change – unlocking opportunity
Campbell Tickell is supporting councils to work through their choices, from reviewing existing development arrangements and testing pipelines to considering delivery models, partnerships, capacity and investment priorities. We welcome the opportunity to work with the sector to help define what a new era of council-led housing delivery will look like.
If your council is considering how to respond to the new funding environment or wants to assess what a renewed council housebuilding programme could look like locally, contact james.mchugh@campbelltickell.com to discuss how we can support you. Find out more our support.
