Labour Lawmakers Press Treasury to Cancel Council Debt for Housing Surge
Labour MPs are calling on the Chancellor to forgive billions in council debt to unlock a post-war scale housebuilding boom ahead of the upcoming Budget.
POLICY WIRE — London, United Kingdom — A group of Labour lawmakers is pressuring the Treasury to wipe out billions of pounds in legacy debt held by local councils. The move is intended to clear the path for a massive expansion in housebuilding, aligning with a pledge made by Andy Burnham to trigger a post-war construction boom.
The push comes as local authorities struggle under the weight of approximately £30bn in debt owed to the central government. This financial burden stems from a 2012 settlement involving Housing Revenue Accounts (HRA), which currently prevents many councils from borrowing the necessary capital to construct essential social housing.
The appeal arrives just ahead of the Budget, which is scheduled to be presented by Chancellor John Healey on Wednesday, October 28. The Labour Campaign Group for Council Housing has formally requested that the Chancellor cancel all HRA debt to provide an immediate financial lifeline to local governments.
Government data underscores the scale of the challenge, with officials admitting in a parliamentary response that councils require a 67% increase in resources to complete the necessary housing projects. Supporters of the debt forgiveness plan argue that removing these fiscal barriers is the only way to meet the nation’s urgent housing demands.
Reporting by Policy-Wire (PW)
