Guidance has been published for the first 14 councils interested in setting up Local Housing Companies. The Government claims the scheme could allow local authorities to make thousands of affordable homes available to help key workers and first time buyers.

The Housing Minister, Yvette Cooper, said the Housing Companies would mark the return of local authorities to centre stage in providing new homes for their communities, although in a new way. The LHCs will be partnerships between councils and the private sector and the idea will be tested in a range of approaches all designed to give councils the opportunity to bring forward land for housing development and to increase the supply of affordable housing.

So far 14 local authorities – Leeds, Sheffield, Nottingham, Newcastle, Wakefield, Sunderland, Dacorum, Harlow, Peterborough, Bristol, Plymouth, Wolverhampton, Manchester and Barking & Dagenham – have voiced their interest in being involved and they have now received guidance on establishing an LHC. Under the pilots those councils will provide surplus public sector land to the LHC and would then play a full part in agreeing development plans and be able to offer low cost housing deals directly to meet local needs.

In return for getting land at no cost, the private sector partners will provide equivalent investment and the construction expertise for new homes. Councils will also benefit from the increasing value of land that could be ploughed back into providing more affordable homes. In effect, the scheme would end the current position of local authoriteis which sell off surplus land but then have only limited influence over how it is developed and over the type and quality of housing that is provided.

Yvette Cooper said more homes were urgently needed for first time buyers and families. “But Government cannot deliver this alone,” she added. “This is a new way to help councils to do their bit to support new homes for key workers and families in their areas.”