Jess McCabe

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My interview with Natalie Elphicke and Keith House, who are…

My interview with Natalie Elphicke and Keith House, who are doing a government review of councils contribution to house building is out in Inside Housing today:

Meet housing’s alchemists

Keith House and Natalie Elphicke have been tasked with finding out how councils can get more homes built with no extra borrowing. Here, Jess McCabe tries to find out if they have the golden touch

Pinning down Natalie Elphicke and the aptly named Keith House is hard. The process of securing their time has been akin to arranging an interview with a particularly flighty celebrity diva.

The pair are in high demand – they are in the middle of carrying out a government review on how local authorities could be contributing to housing supply, and the recommendations are likely to make waves at a time when councils are only just starting to build homes again for the first time since the 1980s.

Inside Housing first tries to tempt Ms Elphicke, a housing finance lawyer who chairs the housing working party of the right-wing think tank Centre for Social Justice, and Mr House, Liberal Democrat council leader in Eastleigh, with an offer of lunch. This is swiftly rebutted by an assistant who states that they ‘categorically oppose’ the idea. Eventually, after a flurry of emails bouncing back and forth, a date and time is agreed upon at their office.

As a result, Inside Housing is on tenterhooks by the time we make our way to a slightly grotty meeting room in Eland House, the headquarters of the Communities and Local Government department, hidden behind the building site that is the £4 billion regeneration of Victoria.

When Ms Elphicke – compact and expensively besuited – and Mr House – tall and enthusiastic – eventually sweep into the room, they are 20 minutes late. But they are laughing and in good spirits. Which is positive, because we’re keen for any glimmer of a clue about what might come out of what promises to be an influential review.

Will Ms Elphicke and Mr House let anything slip? Or will it be as tricky to squeeze any information out of them as it was to get them in the room?

Give us a clue
The review, announced in January, sets out to ‘consider the role that all councils can play in contributing to overall house building’.

Controversially, the scope of the review, which was set by the government, excludes any discussion of raising the limits placed on local authorities to borrow money. What’s more, none of the recommendations can ask government to spend more, or release more funds via local authorities’ housing revenue accounts.

Matthew Warburton, policy advisor to the Association of Retained Council Housing, says there is still room for the review to make substantial recommendations, however. ‘Having the money is only one of the things – you need to have the land, you need to have the expertise. Clearly councils haven’t been building at scale in most cases for the best part of 30 years. They have needed to rebuild that development expertise.’

Still, when it comes to what is standing in the way of councils’ plans to build homes, the sector has been lobbying hard for the cap on its borrowing ability to be lifted. In 2012, Mr House, then vice-chair of the Local Government Association, wrote to the government stating that councils were ‘desperate’ to do more to help solve the housing crisis and calling for the government to help by ‘arming councils with greater freedom and financial flexibilities’.

But either Mr House has since changed his mind or he is taking seriously the duty of the reviewer to set aside their own views. ‘The clarity of the terms of reference means we can actually get under the skin of some bigger housing finance issues, so that we don’t just get local authorities saying to us, “please increase the headroom”. We want to understand the real reasons why councils aren’t doing more,’ he says.

Both Mr House and Ms Elphicke are keen to downplay their own views. Ms Elphicke doesn’t want to discuss her own venture, the Million Homes, Million Lives – a non-profit company which she set up with Calum Mercer, former finance director at Circle housing association – saying, ‘I don’t think that’s one to talk about in the context of the review’.

Mr House adds: ‘Of course you bring your own ideas into the process too, but the review isn’t about what we think as individuals, it’s about what we can assess and what evidence we can put forward, both to ministers as our sponsors, but to the sector as a whole.’

Inevitable influences
However, it seems almost inevitable that their backgrounds will be brought into any discussion of their findings. As well as chairing Million Homes, Million Lives, Ms Elphicke is a former director of the Conservative Policy Forum and author of a Policy Exchange paper in 2010 calling for housing associations to be allowed to raise equity finance in order to build social housing without grant.

Meanwhile, despite his chairing role at the LGA, Mr House is less of a well-known figure in the housing world and is a council leader for the junior member of the coalition government. The only thing that isn’t reminiscent of the coalition partnership is the fact that the two are getting on so well, even finishing each other’s sentences and interjecting to agree with each other.

Perhaps this wouldn’t be as significant if the Elphicke-House review was the only game in town. But Michael Lyons is in the middle of another independent review of the future of housing supply, this time commissioned by the Labour Party. Although the Lyons review has a wider remit, it seems inevitable that comparisons will be made heading into an election year.

Mr House acknowledges as much. ‘They’re different reviews, they’ve got different remits, they’ve got different audiences. But they at core talk to the same subject’ of housing supply, he says. ‘We’ve both met Michael Lyons, we’ll be doing a number of things with him. We think it’s important that although they are independent and different, they are testing the same subject so it’s important that we do work with each other where that works within our own terms of reference to move the debate on.’

Chair, Centre for Social Justice and Liberal Democrat council leader, Eastleigh

Source: Julian Anderson

Ms Elphicke is also keen to quash any suggestion of party politics creeping into the review. ‘I think [our] mix of skills and experiences seems to have been more of the focus of interest, than the politics. And that’s what we would hope for because this isn’t a political review, it’s a national review and it’s for the government. We sit very much in the national interest and not in the party political interest.’

As to the recommendations that the review is likely to come out with, unfortunately both have their lips firmly sealed. Even on the relatively innocuous question of whether they think local authorities are getting enough homes built, they seem unwilling to commit themselves.

‘I think on the question of what type of things local authorities are doing, one of the things we do hope to highlight is good examples, where people have been doing things, and maybe other authorities don’t realise that’s a way to deliver more homes or they haven’t approached it in the same way, so lessons that can be learnt and skills and capacity built more strongly,’ Ms Elphicke offers, while her partner in the review says it’s too soon to tell what the effect of self-financing has been.

It is also too soon to tell what the review is likely to recommend – the pair say they’ve not had time to go through all the submissions yet to get their thoughts together.

But a number of themes come up repeatedly as we talk – particularly councils working in partnership with housing associations and ‘private interests’ to get houses built in their areas.

Valuable assets
Ms Elphicke says that they have been presented with evidence of local authorities ‘unlocking’ the value in their assets, from infilling homes in garages and odd spaces on existing estates, to ‘asset disposal’ – or, in other words, selling off council land to raise money.

‘So where people have found that perhaps they’ve reached a borrowing limit, they’ve found a different way to engage and partner to bring forward the homes that they want,’ she adds.

In perhaps another clue as to the direction of the review, Ms Elphicke and Mr House point out that local authorities are already looking at building private rented and market sale homes.

‘A lot of local authorities are under quite severe financial pressure, they want to protect services at a time when they’ve got declining income in real terms, so they’ve got to be more imaginative about the way they make their books balance,’ states Mr House. ‘They want to protect services and the only way they can do that is to find more sources of income, and housing plays a part in that.’

The review is likely to feature quite a lot of examples of good practice, as well. Ms Elphicke and Mr House are keen to praise those councils that have got things done despite the constraints they are facing.

Ms Elphicke says that the submissions so far have revealed lots of instances where councils are calling for changes that have actually already happened. ‘There’s an enormous amount that’s happened [to policies affecting house building] and quite a few of the early sort of bottlenecks and issues that people had, quite a few have been ironed out.’ Many of these problems are practical, technical issues – such as trying to work out how many homes councils can own outside their HRA.

‘One of our messages is going to be about trying to make sure that in our report we give some clearer summaries about what actually you can do, and that in itself is probably an important piece of work to put out there,’ says Mr House.

In another clue, Ms Elphicke points out that already the review has found a ‘disconnect’ between lobbying and the experiences reported by people working on the ground. ‘One of the classics, one of the ones close to my heart, is obviously you can’t build social housing without any subsidy. But when you get people who are actually doing it, they’re actually delivering, there is a bit of a disconnect,’ she says.

Both are keen to emphasise that local authorities are proud to be building homes and are passionate about adding to housing supply. Between them, they use the word ‘enthusiasm’ more than a dozen times.

It’s not all going to be soft recaps of policies already in place or examples of good practice, however. Ms Elphicke explains that the pair is working with the CLG on a detailed mapping of which councils are facilitating building and which are not. Inside Housing has done some of this work for them, by surveying which councils are building and which are holding back. The review is likely to have some choice, as well as supportive, words for those that aren’t building.

Because the pair are reluctant to say anything of substance about the contents of the review, we agree to meet a few weeks later for a second chat, in the hope they will have more to say. However, after rescheduling on the day of our second conversation, Inside Housing’s final visit to Eland House fails to shine much further light.

In July, the first ‘something’ is due out – Mr House and Ms Elphicke are unwilling to call it an interim report. We will have to wait on tenterhooks a little longer.

Councils building

Earlier this year, Inside Housing used freedom of information requests to investigate exactly which local authorities in England were using their housing revenue accounts to fund the construction of new council housing.

We found:

  • 87 per cent of English stock-holding councils plan to use the HRA to fund new homes
  • 15,630 homes already on the drawing board for the next 30 years
  • 2,492 homes planned by Hackney Council over 20 years, the local authority with the biggest plans to build

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