Local authorities would be able to generate £320bn for the wider economy if they had the powers to build a ‘new generation’ of high-quality council housing.
Ahead of today’s Budget, the Local Government Association (LGA) has called on the chancellor to grant councils the powers to build 100,000 high quality social homes every year.
The LGA and Capital Economics has calculated that every £1 invested in a new social home generates £2.84 for the wider economy.
They also found that every new social home would generate a saving of £780 per year in Housing Benefit as well as a fiscal surplus through rental income.
The study looked at four different future economic scenarios to demonstrate how new social housing will deliver gains to tax payers. The worst-case scenario results in a £102bn return.
‘The last time we built enough homes councils built 40 per cent of them. We need to get back to those levels if we’re to tackle our housing crisis, which is why we need to look towards delivering a new generation of 100,000 high quality social homes a year,’ said LGA chairman Lord Porter.
‘The gains are enormous. Investments in social housing could generate returns up to £320 billion over 50 years, helping countless families along the way by creating local jobs and building homes people need and can afford.
‘Councils have been quietly getting on with building some outstanding new homes, they now need to be free to deliver them at scale. This is because the future of council housing will deliver high quality and innovative design, support local builders, create local jobs and training, and build where the market will not.’
‘On Monday, the chancellor has a real opportunity to deliver a once-in-a-lifetime change that could benefit thousands of people across the country. We encourage him to take it,’ he added.