Housing plans in Reading have been put on hold after the government scrapped the Housing Revenue Account (HRA) borrowing cap.

Reading Borough Council (RBC) bid for over £40m in funding in late September to build another 170 affordable new council homes in Reading.

The council announced the bid on October 19 but were later told that funding was on hold due to the removal of the borrowing cap.

Cllr Ennis said: “This council is extremely serious about bidding for funding to build as many council houses as possible.

“We have built a significant number and we intend to take as much advantage as possible for any chances for increased funding.”

With the cap lifted, the amount borrowed by councils is expected to soar.

Councillor David Stevens raised concern about how the council would handle this responsibility at the policy committee on Monday.

He said: “Once the cap is removed, there is very little control over how much we can borrow.

“That is potentially a good thing. In principle I am supportive.

“What I wouldn’t want to see is massive debt for a future generation.”

Councillor John Ennis, Reading Borough Council’s Lead Member for Housing, responded: “Please seek reassurance that while the cap has been lifted, we won’t get ahead of ourselves.”

The Ministry of Housing, Communities and Local Government announced opportunities for councils to increase borrowing within the HRA in June 2018.

The council’s bids were for an additional £33,180,400 of HRA borrowing capacity and £7,920,000 in Affordable Homes Programme grant funding to support a £47,916,000 development programme.

Bidding for Affordable Homes Programme funding has also been suspended.

The council is “waiting to see if there is greater certainty in respect of funding” and has “pressed pause”.

RBC has commissioned an external validation of the current 30-year HRA business plan to ensure the council responds robustly to the changes to the cap.

Reading needs to provide an additional 699 homes every year, of which 406 needed to be affordable, according to the 2016 Berkshire-wide Strategic Housing Market Assessment.