Leeds City Council needs £20m-a-year from government to build 200 new council houses a year

More than 200 new council homes could be built in Leeds every year – but Leeds City Council will need an extra £20m a year from Government to make it happen, a report has claimed.

Leeds wants to build an extra 200-240 affordable houses a year.
Leeds wants to build an extra 200-240 affordable houses a year.

The authority has been able to invest in building more than 1,000 affordable homes since 2015 – in part from money generated from the sale of council housing in the Government’s long-running right-to-buy scheme.

But the report into Leeds’ council house growth programme claims government rules on reinvesting right-to-buy receipts mean the council will need an extra £21m-a-year in order to continue delivering the highest number of affordable houses possible.

Sign up to our daily newsletter

Decision-makers at the authority are set to discuss its council house growth programme at a meeting next week.

Leeds wants to build an extra 200-240 affordable houses a year.

Right to buy receipts generate around £9m-a-year for the council. But existing laws mean only 30 per cent of the costs of new council housing schemes can be paid for using right to buy money.

It claimed this would mean that, in order to reinvest all of its right to buy cash, it would need an extra £21m each year from central government – as this would mean £9m would be 30 per cent of the total sum.

If the cash generated through right-to-buy is not spent within three years, it must be returned to central government.

The report added: “With funding of £30m (per year) the council could deliver between 200-240 homes (per year), but without the requisite amount of headroom to supplement the Right to Buy receipts, the council was at risk of having to return unspent right-to-buy money to central government.

“Due to the borrowing constraints that have been in place in recent years and the impact this has had on our ability to build, the council is at particular risk of losing some of its right-to-buy credits in the next financial year as the majority of spend for our proposed new schemes will not take place until the 2020/21 financial year and beyond.”

It added that current work by the council to build new affordable homes will see 358 new “general needs homes” built between 2019 and 2022.

The report will be discussed by members of the authority’s Environment, Communities and Scrutiny Board on Monday, February 25.