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Council housing budgets are set to rebound

The housebuilding budget for local authorities in England is set to bounce from £65m in the current financial year to £83.4m in 2013/14 – a 28.2 per cent increase.

Requests were sent to the 26 English local authorities listed as starting new houses in 2011/12.

However, the amount of money to be spent by councils is highly imbalanced, with most being spent in three areas.

And the picture is set to become more skewed, with 10 local authorities planning to quit housebuilding altogether.

Meanwhile, 14 of the councils contacted plan to reduce housing budgets to less than £1m a year by 2013/14.

Their responses show that councils in Birmingham, Manchester and Barking and Dagenham in London have accounted for two-thirds of the spend on housing since 2009/10.

The largest budget was Barking and Dagenham’s, which rocketed from zero in 2010/11 to £26m in 2011/12, and will climb again to £32m in 2013/14.

If Barking and Dagenham was excluded from the figures, total council spending would fall next year, instead of increasing.

Together, the three biggest spending authorities have allocated £211.7m between 2009 and 2014, compared with an England-wide bill of £316.8m.

Significantly, these councils are among those trying to make the biggest cuts to overall council spending.

As budgets are squeezed, councils often come under intense pressure to scrap capital projects such as housing schemes.

In 2011/12, Manchester targeted savings of £109m, while Barking and Dagenham was tasked with a £28.2m reduction and Birmingham faced a whopping £212.8m target.

The 10 authorities planning to reduce their housebuilding budgets to zero by 2014 are South Oxfordfordshire, Rugby, Thurrock, East Northamptonshire, Waltham, Calderdale, Canterbury, Broadland, Rochdale and Tandridge.

Manchester made big reductions to its 2011/12 budget, decreasing spending from a £24m spike in 2011/12 to a rate of around £5m from this year onwards.

Dudley has reduced its housing budget from £9.5m in 2011/12 to £0.4m for 2013/14. Portsmouth’s budget was slashed from £4.7m in 2011/12 to zero this year, recovering slightly to £0.9m for next year.

According to the Department for Communities and Local Government, affordable housing stock in England has fallen since last year.

It stands at 57,950 for 2011-12, down from 60,430 in the previous year.

Social rent, intermediate affordable housing and low-cost homes for ownership were all down on the year.

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