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Affordable housing review – Local authorities

Following the abolition of the Right to Buy and the removal of the borrowing cap, the panel looked at what was needed to ‘support ambitious local authorities to build at place scale’ and how to maximise the use of borrowing powers.

Key recommendations:

  • Welsh Government should encourage local authorities (LAs) to use the flexibilities that the lifting of the borrowing cap creates to support delivery of new affordable housing supply. Where appropriate, LAs should have the freedom and flexibility to access grant from Welsh Government direct or through wholly owned Local Housing Company structures.
  • The Welsh Government should encourage LAs and HAs to work in partnership to share skills, capacity and resources, and work collectively, through local and regional procurement frameworks, to support local supply chains.


The panel says it is ‘too early to gauge what affordable borrowing limits LAs will choose to set and these will need to be agreed by full council’ and adds that furthermore, prior to the lifting of the borrowing cap, LAs were not all maximising their borrowing capacity.

Responses raised three key themes:

  • Long-term funding certainty for councils on borrowing, rents, Major Repairs Allowance and access to Social Housing Grant
  • Flexibility and improvements to Local Development Plan, land availability and risks to development
  • A more effective partnership model of procurement is necessary – existing arrangements don’t work for small sites and rural areas.

There were also calls for improvements to Empty Dwelling Management Orders and Compulsory Purchase Orders and a set of core or minimum principles for Section 106 agreements.

A new framework

The panel notes a disparity between the ambition to build and delivery of key housing requirements in some areas and evidence of ‘skills, resources and capacity challenges’ within local authorities. Councils were at very different stages in their new build plans, with some looking at Local Housing Companies and new housing models to increase the quality and speed of delivery of new homes.

It wants to encourage partnership working with housing associations ‘recognising the limited pool of skills and capacity for development in Wales’.

The panel is recommending reform of the grant model (see financing section) including access to grant for local authorities that can demonstrate value for money and effective use of other resources. It goes on:

‘The panel recommends grant be awarded to LAs meeting the criteria of the new model which should include evidence of having the track record, skills and capacity to deliver new homes. This evidence could include partnership working and this should be encouraged to avoid exacerbating the skills and capacity challenges facing the entire affordable housing sector.’

Additional recommendations

  • Welsh Government should link collaboration to grant distribution to assist with capacity, whilst having the benefit of supporting local key strategic priorities. Greater collaboration between HAs and LAs would result in the delivery of more affordable homes.
  • Welsh Government should issue strengthened LA HRA guidance.
  • Welsh Government should streamline the Compulsory Purchase Orders process and improve the Empty Dwelling Management Orders process so that it functions better than any alternative work around solution.
  • There should be more power for LAs to increase Empty Property charges and the rate should be increased.
  • A set of core / minimum principles should be produced for Section 106 agreements and should include minimum acceptable criteria for such developments.

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