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Budget Reactions – Opposition Leader Criticises Government for Preventing the Building of More Council Homes

Cllr Caroline Reeves

The leader of the opposition at Guildford Borough Council has criticised government policy which prevents the council from building council houses.

In the debate on the GBC budget Cllr Caroline Reeves (Lib Dem, Friary & St Nicolas) said: “The Conservative government is, on the one hand, pressing for more homes to be built but at the same time is preventing local authorities from taking real action by preventing them from borrowing money to build new social housing.

“This is ludicrous. While we can borrow to help build student accommodation, we can’t borrow to build for others who really need our help.”

The eight Lib Dems present in the Millmead council chamber voted as a block and abstained when it came to the vote on the budget but Reeves made it clear that her group supported further consideration of the controversial proposal to lend £81 million for student accommodation.

She said: “Liberal Democrats on Guildford Borough Council are pleased that the council has heeded our calls to support the building of more housing and we support investigating further into borrowing £81 million to build student accommodation.

“However, far more needs to be done to help our town’s private renters who have very little security and often end up paying extortionate rents for substandard accommodation.”

Cllr Tony Rooth

But from within the Tory ranks came some criticism and a note of caution on the £81 million loan for student housing.

Cllr Tony Rooth (Con, Pilgrims) who has crossed swords with the leadership on several issues in recent months, including the link to Dongying and The Village, said: “As far as the student population is concerned I have focused on the Local and Corporate Plans and they do focus on the need for student housing, rightly so, but I don’t see any reference to investment by this council.

“Clearly the provision of student accommodation is for the student body to provide… So in my view, our possible investing in student housing is pretty new and it’s very large at £81 million. The council and the ratepayers are being asked to invest in a third party to deliver their own housing need, not those of a borough as a whole…

“I am pleased to see… that our existing investment property portfolio performs well a return of 6.4%, across all sectors and I think we should expect any investment in student housing to generate a similar rate. I think… we need proper advice on this… because it is a huge investment.

“The proposal is very new to councillors it was only brought to the council on the 8th January at the joint EAB [Executive Advisory Board]. It went to the Executive on 22nd January but there was no debate, in public or in private, and now it is here. Frankly, the proposal should have been brought to councillors earlier, in December, at the latest, and then to the joint budget task group… we’ve actually had only 30 days to look at this item of £81 million.

“…we should be grateful, that the final decision will be referred to full council because at present gives the Executive the power to make decisions without any cap on size or cost. This ought to be corrected, in my view, because otherwise the power is in the hands of the few over issues that may affect the many.

Later speaking on the council provision of housing Rooth highlighted the number of local people who are waiting for housing. He said: “We do have a problem with housing obviously. We have 2,750 on our housing wating list. We have 2,300 of those in the priority categories.

“The waiting time for our housing is about four to five years, on average. For many other councils it’s ten years and more. And that is really because of two aspects and I am afraid they are both government policies. First of all is the right to buy. A wonderful idea when it started – the tenant’s right to buy after three years now at a £78,600 discount…

“And that rather inhibits our own council’s policy of trying to increase our housing stock… I was shocked yesterday when one of our new build properties, which was built in 2015, is now subject to a potential right to buy. We can lose our council stock very quickly and relatively cheaply.

“The second is the forced sales of high-value social housing and that is to extend the right to buy to housing association tenants and that is going to be paid for by the sale of high-value social housing in places like Guildford.”

Cllr Susan Parker

Leader of the Guildford Greenbelt Group, Susan Parker (Send) addressed the new strategic approach the budget represents. She said: “We are borrowing £407 million. Our council tax next year is budgeted at £9.5 million, plus parish precepts, and retained business rates are forecast to be £26.6 million.

“With a core income of around £36 million, we are borrowing more than 11 times our gross income. With repayments rising to £6.6 million in 2022, that would still take 60 years to repay, assuming future councils do not borrow to any significant extent. Looking at [the budget], it can be seen that most of the new borrowing has not yet taken place and so we do have an opportunity to rethink at this stage, and I would urge us to do so.”

Turning to the student housing loan proposal she said: “£81million is a very considerable chunk of this council’s funding. I understand that it is not a choice between student homes and council social housing but I am aware of some discomfort about this level of funding being provided to the university.

In conclusion, Parker warned: “Given financial uncertainty, I do not think it is prudent or sustainable to engage in a 60-year borrowing programme. This is too much borrowing at an uncertain time. Let us review the borrowings we have already agreed and reconsider; let’s ensure our asset base is protected and not exposed to market risk or fluctuation; let’s make sure that we focus on our core activity of managing and delivering services to our local community. We aren’t here to gamble with the public’s money.

Cllr James Walsh

Giving the Labour point of view was Cllr James Walsh (Stoke). He said: “This is a difficult budget at an increasingly difficult time, a time of wage stagnation and price inflation we are quite comfortable in agreeing a 3% increase to Guildford’s element of the council tax. But there are people in our ward and across the borough who will feel the pinch.

“We are horrified by the 6% increase to be made by Surrey [County Council] and this partly represents a long standing failure by that council to get a grip of adult social services. Most of all though, it represents the uncaring nature of the government’s ongoing austerity drive, where austerity means forcing local authorities, police and fire chiefs to make brutal cuts to services at a time of rocketing demand.

“It means, inevitably, that local councils like Guildford are forced to take the blame when services that people rely on are reduced or cancelled.

“Put simply we are now having to build our budgets around council tax returns and the less assured business rates because, from this year, financial support from the government has stopped altogether.”

All four political parties at GBC have been invited to write opinion pieces on the GBC budget. We hope to start publishing these over the weekend.

See also: Concerns Expressed Over Student Accommodation Loan As GBC Agrees Budget

Click here to see the GBC webcast of the debate.

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One Response to Budget Reactions – Opposition Leader Criticises Government for Preventing the Building of More Council Homes

  1. Sean Jenkinson Reply

    February 13, 2018 at 9:09 am

    I see the Labour representative gave no view, at least in this story, about the £81 million for student accommodation. Well done to the others bringing it up as it is an absolute slap in the face to most people telling us they going to put our council tax up and they give the university £81 million of it.

    As for more money to build more council housing, maybe if the government stop letting people buy their council property there would not be such a need for more council housing to be built, people get such a bit discount (I know it’s not so big now) they can buy them and sell them after five years at a big profit. And where does the money from the sale of council properties go?

    Cllr Philip Brooker, Lead Councillor for Housing, responded: “The council is not giving or lending any organisation £81 million in connection with the proposed future development of student accommodation. This potential project and any possible partnerships are at a very early stage. All councillors are aware of the initial proposals covered in the confidential part of the budget council agenda, and the details and business case will be discussed at future council meetings.

    “Exploring how the council can potentially deliver some purpose-built student accommodation is a way to raise income to help fund our services and will also help free up town centre housing. The proposed student accommodation project has no negative impact on council tax and is intended to help reduce pressure on the council’s budget and funding.

    “Our borough has a desperate need for housing and the Council keeps any receipts from the sale of homes under the government’s Right to Buy policy. This money helps to fund replacement housing, as the council is not allowed to borrow to build social housing. It can also be used to repay our share of the national housing debt.”

    Cllr James Walsh was also invited to comment.

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