In October 2017, Paul Hackett from the Smith Institute published ‘Delivering the renaissance in council-built homes’. The report spans over forty pages and explores the role, performance and opportunities for Local Housing Companies (LHCs). The key driver for the review was to provide an overview of the contribution of LHCs to the housing crisis, given that historically there has been little official information on their activity. The report provides a useful indication of why LHCs are being set-up by local authorities, the types of legal and governance structures being employed, as well as the variety of homes being developed to increase supply across a range of tenures. There are also several case studies throughout. These provide a valuable and in-depth insight into how different authorities are utilising their LHCs as vehicles for innovation to address local housing needs.
The approach to the research included a desktop review, 31 interviews with a range of stakeholders (including practitioners, councillors and professional advisors), seminars and roundtable discussions, as well as an online survey of 74 councils (out of a possible 350). Unfortunately, this evidence base is a key drawback of the paper. For example, guesstimates extrapolated from an unrepresentative survey are sometimes presented, therefore the report does not fulfil its secondary aim to fill the statistical gap on LHC’s numbers, types and coverage. In an ideal world a more robust methodology could have been to use Freedom Of Information requests to establish the number of LHCs currently in operation . This would have enabled a more accurate reflection of the sector’s approach to structure, legal composition and its planned development pipeline.
It is important to note that the report does identify both the benefits and drawbacks of the LHC approach. This includes highlighting how some commentators have expressed that they do not necessarily always represent value for money. However, these opinions are sometimes left unexplored and unchallenged. It is also disappointing that the report acknowledges that the “general extent to which LHCs can support social housing is generally limited – albeit not inconsequential”. It is estimated that 30%-40% of the planned output will be affordable housing (over 3,000 units a year by 2022) but that level of social rented could be around 10% of the total – over 1,000 a year in five years’ time.
Key recommendations made in the report include but are not limited to offering a centre of excellence or learning hub on LHCs, establishing a high-level task-force, and ensuring that LHCs are able to retain all their right to buy (RTB) receipts for investment by their LHC. These are all valid, but perhaps could have been strengthened further through the inclusion of further analysis / quantification of the potential benefits. It would also have been beneficial to include more specific recommendations aimed at what LHCs and LAs themselves can do to contribute to existing provision.
Overall this report goes some way to help improve the general knowledge and understanding of the role and contribution of LHCs to affordable housing provision. It also makes clear that LHCs have an active and growing role in helping to improve overall housing supply. It does therefore help position the business case for ensuring that Government recognises LHCs contribution to supporting overall housing growth. There however remains an opportunity to positively build on the existing evidence base of the size and scale of the sector through additional research so we can understand further how the LHC sector can deliver a renaissance in council built homes.