Twenty of England’s largest local authority landlords have warned that the council housing financial model is ‘unsustainable’ with councils’ housing budgets facing a £2.2bn ‘black hole’.

A cross-party group of local authorities – including Birmingham City Council, Leeds City Council and Camden Council – warned that England’s council housing system has been hit hard by a lack of funding and ‘erratic’ national policy changes.

New analysis from Savills cited by the group shows that councils’ housing budgets will face a £2.2bn ‘black hole’ by 2028.

Ahead of a full report to be published later this year, the group of council landlords have published five solutions for the new government to ‘secure the future of England’s council housing’.

The solutions are as follows:

1. A new fair and sustainable HRA model – including an urgent £644m one-off rescue injection, and long-term, certain rent and debt agreements.

2. Reforms to unsustainable Right to Buy policies.

3. Removing red tape on existing funding.

4. A new, long-term Green & Decent Homes Programme.

5. Urgent action to restart stalled building projects, avoiding the loss of construction sector capacity and a market downturn.

Cllr Kieron Williams, leader of Southwark Council, said: ‘Our country’s largest council landlords have come together because we see every day how council homes transform lives for the better. For families across our country their council home is a foundation – giving them the security needed to put down roots, flourish in childhood, get on at work, stay healthy and age well.

‘However, erratic policy choices from our last government have left council housing finances completely broken and the system’s future is in danger. Councils are being forced to cancel new build developments, and even sell off council homes, to focus on keeping their existing residents safe.

‘We are releasing this interim report now, from England’s largest council landlords, because we want to work with the new government from day one to deliver the more and better council homes that our communities need.’

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