Southwark housing boss has confessed the council doesn’t have the cash to start all the 11,000 council homes it promised to build.
Southwark Council housing director Michael Scorer admitted the Labour-run council only has the money to construct 3,200 of the 11,000 council homes it has pledged to begin by 2043.
Speaking to MPs on Monday, June 19, Mr Scorer said the commitment was one of the biggest financial challenges facing the council in terms of social housing.
He said: “We’ve got a commitment that’s unfunded to build 11,000 council homes. We’ve got about 3,200 that we can fund at the moment, which is less than we would like to.”
Mr Scorer said that the council was already borrowing as much as it could safely do to fund projects and was “struggling for government help.”
Conditions attached to many grants prevented the council from being able to use them, Mr Scorer told the Levelling Up, Housing and Communities committee.
“Some of the money we could potentially use, we find the strings attached to the use of it means we can’t use it… We end up potentially chasing lots of pots of money and I think some co-ordination would be better,” he said.
Mr Scorer added that the council faced a bill of £30 million per year for the next three years for safety works on its properties and would have to fork out £800 million over the next 10 years on making homes more eco-friendly.
He said: “Our peculiarity is that we have 17,000 homes attached to district heating systems. A lot of those were built in the 60s and 70s. They need considerable investment. They haven’t been invested in, in a profound way, for many decades. That’s about £400 million.”
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Soaring construction costs, Brexit, the war in Ukraine and Covid had also hit council finances hard, Mr Scorer added.
Emily Tester, Liberal Democrat councillor for North Bermondsey, said the council’s admission that the 11,000 homes promise was unfunded exposed “Labour’s smoke and mirrors approach to social housing in Southwark.”
She said: “All of Southwark is now fully aware that their target of 11,000 new council homes was an unfunded fantasy. With the future of our council homes programme in jeopardy, all we’re left with is Labour’s record – 2,400 fewer council homes and over 17,000 on the housing waiting list.
“Residents are not getting the honesty they deserve from the council. It is more urgent than ever for the government to properly fund the new homes we desperately need. Southwark Labour need to ditch the spin, and focus on fighting for the resources required to provide good quality housing.”
Kieron Williams, Labour leader of Southwark Council, said: “We are currently the largest builder of new council homes in the country, with one third of those started nationally last year being in our borough, and over 3,200 built or under construction.
“We know that every one of these homes will transform lives for decades to come, but building them is getting harder and harder.
“We’ve seen a perfect storm of rocketing build costs and interest rates and increased need to invest in our existing homes. At the same time, government-set reductions in the rent we will receive mean we now have £1bn less to spend on our homes over the next thirty years.
“We are now looking at how we will fund our future phases of new council homes, using a mix of grant from the Mayor of London, private sales and wider income.
“We are determined to keep finding a way. However if the government does not step in to support there is a real risk the supply of desperately needed new council homes across our whole country will dry up, locking families across Britain out of having a decent home that they can afford.”
