Angela Rayner urged to start massive council house-building programme

A massive council house-building programme is needed to stop the housing benefit bill soaring to £70billion, Labour has been warned. It would mean building 100,000 new high-quality homes every year, according to a paper backed by former Labour housing secretary Ruth Kelly.

Deputy Prime Minister Angela Rayner is overseeing plans to build 1.5million new homes before the next election. However, this will not be enough to solve the housing crisis, according to research by Policy Exchange, because many people will not be able to afford them. New council houses must be affordable but must also be "beautiful" and well-designed to avoid the "stigma" once attached to social housing, said the paper.

In a foreword to the report, Ms Kelly said: "Building more council homes is likely to sit at the centre of any credible strategy to tackle the current housing crisis, not least because it is one measure to increase supply over which the Government has some control.

"But this paper sets out a number of other practical reasons why the Government should consider a serious council house-building strategy, rooted both in affordability and personal and community identity. Council houses, it argues, must not only be built, they must also be of high quality."

She said well-designed council housing could "promote mixed communities and facilitate greater social interaction between different groups".

UK council housing stock has declined dramatically in recent decades. In 1969, council housing amounted to 28% of all housing stock in England. In 2023, it was just 6%.

In 1954, just under 70% of all new UK homes were built by local authorities. In 2022, it was just under 2%.

The lack of council houses increases the cost of housing benefit, on which the UK currently spends almost £25billion a year - with the cost expected to reach £70billion by 2050 on current trends.

Among other changes, the Policy Exchange paper says a new council house should be built every time a property is sold under the right to buy scheme.

The paper is also backed by Kevin Hollinrake, Conservative Party chairman and ex-shadow housing secretary. He said: "I welcome the central message of this paper, as part of Policy Exchange's longstanding Building Beautiful programme.

"There is no solution to the housing crisis unless we are committed to building beautiful, inspiring, and affordable homes. If the recommendations of this report are properly considered, a new generation of council housing can make a meaningful contribution to fostering both strong communities and national economic growth."

Labour MP Danny Beales, a member of the Health and Social Care Committee, said: "Having experienced homelessness in my teens, and after spending 10 years as a councillor working hard to deliver new council homes, I believe more strongly than ever that everyone has a right to a decent, affordable, and high-quality home.

"As set out so clearly in this paper, we should be building places that are tenure blind, where affordable housing is built to the very highest standards and people have high-quality, beautiful homes that communities feel pride in. We need to redouble efforts to bring about a new generation of council homes, to end the growing crisis of homelessness and temporary accommodation use, which is blighting the life chances of far too many families."