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David Ellesmere is proud of 108 new council homes, but fears for future building

It was fantastic to be able to announce that the final tenants have now moved into the new council houses at Bader Close. 

Consisting of larger and smaller family homes and bungalows for those who are less mobile, it’s great to see a community is already starting to form.

Bader Close building a better ipswich

It was fantastic to be able to announce that the final tenants have now moved into the new council houses at Bader Close. 

Consisting of larger and smaller family homes and bungalows for those who are less mobile, it’s great to see a community is already starting to form. 

At 108 homes, this is the largest council house development in Ipswich for fifty years. But let’s not kid ourselves this is going to solve the very real housing problems in Ipswich. With over three thousand people on the council waiting list, it would take decades of building at this scale to make a dent. 

And that is not going to happen.

Not because we don’t have the will to do it, but because the Government is determined to stop us. 

Our ability to build new council houses came about through reforms to housing finance conceived  in the last days of the Labour Government and enacted by the Coalition Government. 

There used to be a national housing system where some councils had to pay a proportion of the their rental income to the Government for redistribution to other councils. 

Ipswich was paying around £6million to the Government. 

The reforms meant we could buy our way out of this system by taking on around £100 million of debt. This sounds like a lot but was the equivalent of a mortgage of £20,000 on each council house. 

Crucially, even with the repayment of this debt over 30 years we could still maintain all our houses and be better off by around £5 million a year. This is the money we have been using to build new houses. 

But this is now under threat from changes in a new Housing Bill going through Parliament. 

Our 30 year business plan assumed rents would rise according to a Government formula which increased in line with inflation. The Government is now changing this formula so that rents must fall by 1% a year.  

New “pay to stay” rules mean households with a “high” joint income of £30,000 will have to pay “market rents” - an increase of around 25% on what they are currently paying. This money can’t be used by the council to build more houses - it is confiscated by the Government. 

What’s worse, the money taken by the Government is based on how many “high income” households the Government thinks you have. If they’re wrong we could have to pay them more  than we’re actually receiving. 

It’s a similar situation with the Government’s plans to force councils to sell “high value” houses when they become vacant. Again the money goes to the Government. Again it is based on how many houses the Government thinks will become vacant in a year. You have to pay the Government whether the homes become vacant or not. 

Taken together these measures mean that the 30 year housing business plan of every council in the country has been blown apart. Income will be millions of pounds less than predicted. 

Obviously our priority has to be to maintain our existing houses. This inevitably means that fewer new homes will be built. 

In Ipswich we had intended to build 100 new council homes a year for the foreseeable future. 

It now looks like our housing programme could grind to a halt through lack of funds by the end of this parliament. 

This is an odd decision to make for a Government that says it is committed to building more houses. 

But an entirely logical one for a Government that is determined to kill off council housing for good.

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