The LGC article reflects perhaps the nature of general elections and the slightly strange promises made.  

On the surface this seems like a Damascene conversion for the Conservatives to the merits of councils building, well, council houses. ?  As LGC points out, although Manchester and Birmingham clearly have their own challenges, the homelessness crisis and the shortage of homes is clearly more acute in  London and the South-East.   

More importantly I would challenge the economics behind this.  In effect it looks like councils will be given permission to borrow more (presumably via some HRA device) and they can then build the homes. However, it looks like an unspecified proportion will be subject to RTB discounts. The questions is why would a council ever do this? How would it make a rate of return on an asset with a 60-100 year lifespan which they would need to sell after 10-15 years for a knock down price? Where’s the incentive? More debt, pressure on revenue, some relief on housing the homeless for 10-15 years and then nothing.  The devil may be in the detail but this seems like an investment opportunity  councils may want to avoid.