South Tyneside Council backs calls for £644 million to fix ‘broken’ council housing system

South Tyneside Council is among 100 local authorities across the country who have signed into an “unprecedented coalition” which is calling for an emergency injection of £644 million from the Government.

The call for funding from councils is to help stabilise their housing accounts and prevent investment in new homes being delayed or cancelled.

It follows a report commissioned by Southwark Council into the future of council housing - which concluded that the current system in England is “broken”.

The coalition has warned the government that the current model for council housing finances could leave a £2.2billion “black hole” in councils’ dedicated budgets by 2028.

Southwark Council’s report states that without proper funding from the Government, most councils will struggle to maintain their existing homes, meet the new demands to improve them and also build new homes for social rent.

Following the publication of the report, Cllr Tracey Dixon, Leader of South Tyneside Council, has called for the “right financial tools” to help the local authority overcome barriers in the current climate.

She said: “The report highlights some key challenges we face within the housing sector and we fully support the recommendations contained within it.

“We know that council housing can be a significant part of the solution to the current housing crisis, however we need the right financial tools and flexibilities to overcome the current barriers.

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“Locally, the transfer of our housing services from South Tyneside Homes back under direct council control will allow us to make better use of resources and deliver a more efficient service to our tenants but we need further support from government to ensure we have sustainable long-term solutions.”

Southwark Council’s report set out five solutions to help ease the pressure on the current council housing situation.

These include:

• A new fair and sustainable Housing Revenue Account (HRA) model, including an urgent £644 million one-off rescue injection, and long-term, guaranteed rent and debt agreements.
• Reforms to unsustainable Right to Buy policies.
• Removing red tape on existing funding.
• A new, long-term Green & Decent Homes Programme.
• Urgent action to restart stalled building projects, avoiding the loss of construction sector capacity and a market downturn.

You can view Southwark Council’s full report by clicking here.