This week the Mayor of Newham Rokhsana Fiaz has written to the Chancellor of the Exchequer Sajid Javid asking him to reverse a decision made by the Public Works Loan Board to increase interest rates by one per cent for all new council borrowing.
In the letter Mayor Fiaz writes: “In the last government, a decision was made by the Public Works Loan Board (PWLB) to increase interest rates for council borrowing by 1% on all new borrowing. This decision occurred only 20 days before a general election was called, and I am writing to you now to ensure this issue is not lost, nor forgotten about.
“Of all London boroughs, Newham spends the most on temporary accommodation, a figure of some £61.1 million in 2017-18. We have a housing waiting list of over 27,000, and high levels of homelessness in our borough. Truly, the sharp edge of the housing crisis is felt by Newham residents.
“In the London Borough of Newham, we have embarked on an ambitious house building programme, committing to 50% of the homes we deliver being let at a social rented level- with ambitions to deliver 1000+ affordable homes. We want good quality homes in liveable neighbourhoods that will create safe and stable communities.
“Although the Prime Minister has stated previously that the government would “focus relentlessly on increasing supply”, increasing the interest rates by this amount will have a devastating effect on our house building plans, affecting the communities we had hoped to see thrive for decades to come.
“A 1% increase in interest costs over the lifespan of our Housing Revenue Account business plan would cost us the equivalent of building 353 homes. That is a whole neighbourhood that we lose through this increase, and 353 families who have lost the chance of a place to call home.
“A joint letter was sent to you in your previous term as Chancellor, on November 1st, outlining that this rate increase means fewer homes will be built in all local authorities across the capital. Choosing to reverse the decision to increase borrowing rates – or giving councils committed to regeneration and housebuilding a preferential rate of interest – will allow us in Newham to continue with our plans to create happy, healthy communities that lay the foundations for our residents to flourish.”