Public Sector Focus

20.12.16

Housing white paper: Time to go one step further

Source: PSE Dec/Jan 16

PSE considers the recent housing announcements in the Autumn Statement and analyses what is needed in the upcoming white paper to ensure councils have all the tools necessary to tackle the crisis.

As PSE went to press, central government was due to publish an eagerly anticipated housing white paper, which organisations believed offered a pivotal opportunity to tackle the UK housing crisis through a “comprehensive package of reform”. 

In his Autumn Statement in November, chancellor Philip Hammond laid out a handful of new housing-related measures designed to help deliver the white paper’s reforms. This shortly followed an unprecedented U-turn that saw the government scrap its controversial Pay to Stay scheme, which would have forced social housing tenants to pay more rent if their income was above £30,000 per year (£40,000 in London). 

In the statement, Hammond also unveiled a new Housing Infrastructure Fund, a £2.3bn package to be allocated to local government on a competitive basis by 2020-21. The money is intended to provide infrastructure targeted at unlocking new private housebuilding in areas of greatest need, helping deliver 100,000 new homes. 

“The challenge of delivering the housing we so desperately need in the places where it is currently least affordable is not a new one,” he told the Commons. “But the effect of unaffordable housing on our nation’s productivity makes it an urgent one.” 

The chancellor noted that the government would also relax restrictions on grant funding to allow for a wider range of housing types, meaning providers will be able to deliver a mix of homes for affordable rent and low-cost ownership to meet regional needs. “And, to provide affordable housing that supports a wide range of need, we will invest a further £1.4bn to deliver 40,000 additional affordable homes,” he added. 

“I can also announce a large-scale regional pilot of Right to Buy for housing association tenants. And continued support for home ownership through the Help to Buy: Equity Loan scheme and the Help to Buy ISA. This package means that over the course of this Parliament, the government expects to more than double, in real terms, annual capital spending on housing.” 

House building hi-res c. Rui Vieira edit© Rui Vieira

13,000 less homes? 

While Hammond maintained that this “commitment to housing delivery represents a step-change in our ambition to increase the supply of homes for sale and for rent”, as well as to deliver a housing market “that works for everyone”, the Office for Budget Responsibility’s (OBR’s) predictions signalled quite the contrary. 

In its assessment of the Autumn Statement, the OBR said dropping the requirements for housing associations to move to a shared-ownership model and scrapping Pay to Stay would “both reduce the cash inflows available for housebuilding”. This will be partly offset by additional grant funding and other smaller measures, but the net effect of the chancellor’s announcements will be to “reduce cumulative housebuilding by housing associations by around 13,000 over the forecast period, with a boost next year becoming a drag by 2019-20”. 

In its response to the housing announcements, the LGA said measures to allow councils to “shape investment” would help build the right homes in the right places. But its chairman, Lord Porter, added: “If we are to stand any chance of solving our housing crisis, the government’s forthcoming housing strategy must hand councils the powers and funding to resume their historic role as a major builder of affordable homes. 

“Councils must be given a leading role in building the new homes that are needed and help people live healthy and happy lives and build strong communities. This means allowing them to borrow to invest in housing and keep 100% of the receipts from properties sold through Right to Buy to build new homes.” 

Devolving powers 

While other reforms are desired as part of the white paper – such as the need to exempt London from the National Planning Policy Framework, treating the capital’s boroughs as a special case when it comes to home planning – the need to give councils a leading role in housebuilding has so far topped the local agenda. 

After all, calls for greater powers over housebuilding are not new. Back in 2014, the Adonis Growth Review advocated that councils should have “serious responsibility” for housing, amongst other sectors, as part of their devolution plans. As these deals as the deals started being struck, pleas for firm housing devolution commitments surfaced. 

Earlier this year, leaders from several northern councils called on the government to “stop agonising” and devolve housing responsibilities during a Northern Powerhouse Conference panel session. John Mothersole, CEO at Sheffield City Council, said solutions to housing growth were currently designed at a national level despite every housing market being local. 

“It is proving very difficult to get the rate of housebuilding that we want to deliver nationally, where the current support is quite rigid and is designed to national level,” he added. 

Shortly after, Lord Bob Kerslake, who chaired the London Housing Commission, pressed for “radical action” to tackle the capital’s housing crisis, including through devolution – backed by a “more unified approach” across the whole of the UK. 

Influential think tank IPPR North returned in October to say much the same thing, arguing that combined authorities will need a special and radical devolution deal to meet local needs for new housing. And just days before the Autumn Statement, a Localis report joined the resounding chorus of organisations who claim that more homes will be built if councils had more decentralised powers. 

“The new elected city mayors present government with an opportunity to devolve more powers over housing and loosen the leash on finance,” Localis chief executive Liam Booth-Smith said. “With a housing white paper coming soon this is a relatively simple win for government.” 

One step further 

In July 2007, the Labour government published a housing green paper designed to shake up the market by delivering more homes more quickly – matched with ambitious building targets, larger investment and an unblocked planning system. At the time, the then housing minister Yvette Cooper MP wrote in the strategy’s foreword that the plan would need to “harness the energy” of local government. 

Now, almost a decade later, it is time to go one step further. Local government must be at the very heart of housing reforms, with the right powers to tackle and fix their regional landscapes and carefully integrate housing in everything else they do across their communities. That is the only lever left to pull to ensure the UK can guarantee more affordable, sustainable and greener homes for the future.

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