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Building Great Homes, Creating Great Places

My speech from today’s launch Building Great Homes, Creating Great Places at the Local Government Association conference here in Birmingham.

Good afternoon ladies and gentlemen and thank you for joining us for the launch of Building Great Homes, Creating Great Places.

It’s safe to say that housing is one of – if not THE – big topic of discussion here at the LGA Conference.

And, as I reflected in my welcome speech yesterday afternoon, the housing debate changed forever with the horrific Grenfell Tower tragedy just three weeks ago.

We’re under the spotlight and now, more than ever, we must re-double our efforts and work with partners to deliver the quality homes needed by a growing population.

At its most basic level, this is very simple.

This is not a debate about bricks and mortar – it’s about people, families and communities.

People want safe decent homes. They want to feel they can get onto the property ladder, they want to know their children can get onto the property ladder. In short, they want to feel that they matter.

Who can argue with that?

But the scale of the challenge is there for all to see.

Here in Birmingham we need 89,000 new homes over the next 15 years to address an acute housing shortage and meet the needs of Birmingham’s growing population.

That’s a very real and very pressing challenge, which is why, last November, I was delighted that the Government finally endorsed The Birmingham Development Plan.

Our ambitious 15-year strategy goes a long way towards addressing the city’s housing crisis, but of course having the plan is one thing, delivering is what really matters.

As the document we’ve launched today illustrates, our aims are simple but ambitious. We have a commitment to:

  • Build enough new homes of all types
  • Enable people to get and keep the housing they need and eradicate homelessness
  • Improve existing housing and its management

So how do we turn this vision into reality?

I take real pride in the fact that we’ve built more social housing since 2009 than any other local authority in the UK.

Birmingham was also the first local authority to build new homes for sale, and has built more than any other Council.

We pioneered the “buy now, pay later”, approach to the sale of new homes in 2009.

This means the Council shares with developers some of the risks of development – delays in securing planning permission, fixing bad ground conditions, buying land up front in a fragile housing market.

In 2016, we developed this approach further with InReach, so that the City Council acts as developer and takes all of the sales risk, but also captures all of the profit.

The homes are selling faster than they can be built and often well before completion.

We have established the successful Housing Birmingham Partnership, with political and agency leaders committed to working together on long term housing aims.

Our big challenge in Birmingham is of course to build new homes at scale and pace.

So part of my job is to sell opportunities in our city to major investors from home and abroad.

In addition to major overseas deals, earlier this year we sold the first ever Brummie Bond to Midlands-based Phoenix Life, raising £45 million that we will be able to use to significantly boost our housing investment plans.

The interest rate is lower than that charged by the Public Works Loan Board (PWLB), which means we will pay £1.4 million less in interest over the course of the loan than would have been the case had it borrowed from the PWLB.

So the numbers stack up. But this was about more than £45 million. It was a clear vote of confidence in Birmingham City Council by the private sector.

With council budgets facing relentless austerity cuts, we must be more imaginative in identifying ways to generate funding.

This council will not raise the white flag of surrender. We’ll go out to the market and sell the huge potential of investing in homes for a young, growing population.

Later this month we will launch our new housing strategy – an action plan that will look at everything from major developments to self-build opportunities.

We’ll look at housing options for first-time buyers through to choices for older citizens.

We’ll renew our efforts to tackle homelessness and build on our successful work to bring empty properties back into use.

One thing is clear. There is no one-size fits all solution to meeting our housing demands.

BUT we have the creative approach, the partnerships and the sheer bloody determination in Birmingham to get the job done.

As I said at the beginning, the Grenfell tragedy served as a reminder that how we meet the housing challenge is one of the most pressing tasks for town halls up and down the country.

Future generations will judge us by how we respond and I know there is a collective determination across local government that we will not be found wanting.

The simple fact is that we cannot afford to fail.

Birmingham City Council to fit sprinklers in tower blocks

Birmingham City Council’s residential tower blocks are to be fitted with sprinkler systems and other fire suppression measures following the Grenfell Tower tragedy in London, where 79 people are known to have died.

City Council leader John Clancy has confirmed that the council will as a matter of urgency look at the 213 blocks of flats it owns to assess what work needs to be undertaken to reassure tenants that their homes are safe.

Cllr Clancy said he was prepared to find up to an estimated £31 million to retro-fit measures which reduce the risk of fire and help tenants to feel safer.

The council leader wants Britain’s biggest councils to lobby the Government to help pay for fire suppression measures in all of the country’s local authority residential tower blocks and has written to the leaders of Bristol, Cardiff, Glasgow, Leeds, Liverpool, Manchester, Newcastle, Nottingham and Sheffield councils asking for their support.

The nine cities plus Birmingham form the Core Cities group, representing the largest councils in the UK and are home to scores of tower blocks.

Cllr Clancy said he hoped Core Cities and other local government organisations would put pressure on the Government to come forward with a financial package to help councils meet investment in fire suppression measures such as the cost of fitting sprinklers.

Cllr Clancy intends to prioritise council spending on a rolling programme to install sprinklers, regardless of whether the Government makes a financial contribution.

One idea under consideration if Government funding is not forthcoming is to pay for the tower block fire prevention strategy from capital receipts – cash raised through selling assets owned by the council.

Cllr Clancy said: “The dreadful events in London have understandably triggered an outburst of public anger and demands that councils need to do far more to protect tenants living in high-rise blocks.

“I became council leader pledging that every child, every citizen and every place matters. Now is the time to underline that promise by recognising that as a council we have a duty to provide the best possible fire protection for our tenants, and we will do whatever it takes to keep people safe.

“But the cost of doing this for all local authorities with tower blocks is certain to be substantial and beyond the means of austerity-hit councils to afford in a timely fashion.

“The Government should accept this is a national emergency that fully justifies establishing a fund to allow councils to fit sprinkler systems as a matter of urgency.

“If the Government fails to respond appropriately, I believe our tenants would expect work on less important building projects to be delayed so that we can make sure our tower blocks are safer places to live in.

“It should also be recognised that a city-wide programme to fit fire-suppression measures will generate significant employment opportunities for Birmingham, creating skilled jobs and apprenticeships and underpinning the council’s commitment to inclusive economic growth.”

ENDS

Notes to editors

In the aftermath of the Grenfell Tower tragedy we have reassured tenants that:

  • All Birmingham City Council blocks have a current fire risk assessment
  • We inspect our blocks on a daily basis and any fire risks are identified and dealt with as a priority
  • We liaise closely with West Midland Fire service
  • We have a programme of fire stopping works

Housing officers wrote to all tower block tenants on Monday and we are planning visits to all tower block tenants to discuss any concerns they may have .

All Birmingham councillors and MPs have been briefed, enabling them to reassure people with concerns in their own wards and constituencies.

We have visited all 213 tower blocks and all our fire checks are up-to-date

Background info on cladding

The current capital investment programme includes external wall insulation which is different to the over cladding with ACM cassette rain screen and curtain walling that appears to have been used on Grenfell Tower.

The council has used insulated render systems to externally clad/insulate BCC tower blocks.  The products that have been used are Structherm, Weber, Alumasc and all are class O or “low risk” as described in the national building regulations.  They have also attained BS8414 part 1 (fire performance of external cladding systems).  They have been used on 16 tower blocks.

Below is the definition of BS 8414.

  • The BS 8414 test methods provide a robust methodology for determining the fire performance characteristics of external cladding systems. The standard is divided into two parts:
  • Part 1 provides a test method for assessing the fire performance of non-loadbearing external cladding systems applied to the face of the building. This can also be used to test rainscreen overcladding and external wall insulation systems.
  • Part 2 provides a test method for assessing the fire performance of non-loadbearing external cladding systems fixed to and supported by a structural steel frame.
  • These test methods were developed by BRE, based on over thirty years of knowledge and extensive research programmes carried out in this field, and were developed to address the challenges of testing and classifying the evolving designs and materials being brought to the market. The test methods were first published as British Standards in 2002 and are carried out in specialist laboratories, such as the Burn Hall at BRE in Watford, where they are performed on external wall systems at full-scale incorporating joints and corner details together with fixings, insulation, fire breaks, cavities and all other elements of the system construction as appropriate. The standard  evaluates whether a cladding system – when subjected to  a simulated fire in a compartment, breaking out of an opening (such as a window) in an external wall – will result in excessive fire spread up the outside of the building and its potential to re-enter at a higher level
  • We comply fully with manufacturer’s installation instructions which have been passed by the British Board of Agrément (industry standard).  Some systems include a horizontal fire break.

Birmingham City Council has taken the above approach following the change in legislative requirements and reported recommendations as a result of previous fire safety incidents such as Lakanal Tower in London and Shirley Towers in Southampton.

£45 million housing Brummie Bond – that’s just for starters

When I became the leader of Birmingham City Council I promised to explore radical ways to generate new funding so that we can build the homes Brummies so desperately need.

I’m delighted that the first ‘Brummie Bond’ under my leadership has been sold, raising £45 million that we will be able to use to significantly boost our housing investment plans.

The decision by Phoenix Life to lend to the council through a bond issue represents a major vote of confidence in Birmingham by the private sector.

Phoenix Life, as you might expect, conducted due diligence into the investment, including a credit review, and concluded that Birmingham city council’s finances were sound and that lending money to the council was a good proposition.

Not only will the bond bring much-needed investment to address an acute housing shortage, it will save the council money because we have been able to negotiate an excellent rate of interest.

The interest rate the council will pay to borrow the money, at an average of 2.36%, is lower than that charged by the Public Works Loan Board (PWLB), which means we will pay £1.4 million less over the course of the loan than would have been the case had we borrowed from PWLB.

I’m determined that the Brummie Bonds programme will go from strength to strength.

With our spending plans facing a relentless austerity assault by the Tory Government, this Labour-led council is determined to be more imaginative and identify ways to generate funding to bring jobs and homes to Birmingham.

This council won’t raise the white flag of surrender and we’ve shown that, to make us less reliant on rapidly shrinking Government grants, we’ll go out and bring in millions of pounds that would normally go to London markets.

Typically, this is Birmingham doing what it does best. Buckling down, being pragmatic. Brummies are doing it for themselves.

We must not underestimate the scale of the challenges that lie ahead.

The Birmingham Development Plan makes it clear that some 89,000 new homes will be required for Birmingham citizens by 2031. We estimate there is sufficient space within the city boundary for just 51,000 homes, leaving 38,000 properties to be built in neighbouring local authorities across the city border.

Radical plans to build new homes in Birmingham city centre are taking shape. We expect over the next few years to deliver 10,000 properties at Smithfield, Snow Hill and Curzon Street, an unprecedented rate of growth in city living.

Birmingham city council stands ready to play a leading role through the Birmingham Municipal Housing Trust, which has built over 2,000 new homes for sale or affordable rent since 2009, with plans for up to 500 homes for affordable rent also in place.

During 2015-16, BMHT built 562 new homes in Birmingham. That was 30 per cent of all new homes in the city.