The Cons ervative-led government came into office with a host of big promises on housing. Before coming into office the now Housing Minister, Grant Shapps, said: “we will build more houses than this Government and its arbitrary targets could ever have achieved” and in an interview with the Finan cial Times in December of last year he said “we’re going to beat this government hands down”.
I don’t have much time for the way in which the housing minister expressed those sentiments but I, along with families up and down the country, would welco me a major building programme. Unfortunately, by the government’s own projections they’ll deliver somewhere between 33-40% fewer affordable homes in this five year term than Labour did in its last five year term. Between 2005 and 2010, Labour delivered 256,000 additional affordable homes in England; this government’s original target for this parliament of 150,000 additional affordable homes, described as low by historic standards by the CLG Select Committee. On no measure will that even come close to matching Labour’s delivery record.
The public won’t judge any government’s housing policy on the calibre of its press statements or the strength of ministerial speeches, but on the number of homes built. In existing homes, the Decent Homes programme looks unlikely to be completed due to funding cuts and in the private rented sector, Labour attempts to introduce a Landlord accreditation scheme and to drive up standards through the Localism bill were opposed by the Tories and Liberal Democrats.
There are three main strands to the government’s housing delivery policy: planning, financing and incentive. Broadly, the changes to planning revolve around the ending of regional planning and the introduction of neighbourhood plans; financing has seen a 60% cut in government subsidy for affordable homes and a shift in the burden to the rents that tenants pay with levels increasing to 80% of market rents and on incentives: the government has removed the stick of the regional spatial strategies and introduced the very small carrot of the New Homes Bonus.
Changes to Planning
In the summer of 2010 Secretary of State, Eric Pickles announced the immediate scrapping of the Regional Spatial Strategies, making England unique in Europe in not having a regional or sub regional aspect to its planning policy. According to research carried out by Tetlow King at the time, some 1300 homes a day were being lost through what the CLG select committee called a “vacuum in the planning system”. The High Court ruled the Secretary of State acted unlawfully. The Localism Bill when enacted brings significant changes to planning policy at a local level. In evidence given to the Bill committee on these changes, Pete Redfern of Taylor Wimpey, one of the nation’s largest house builders said that the changes would extend the amount of time before building levels returned to those seen under Labour to eight years. At a time when we want to boost the levels of house building actions which will slow it down are not sensible.
Cuts in Subsidy, Hikes in Rents
Government subsidy for new affordable homes has been cut by 60% and rents are to be increased for new HA tenants to 80% of market rents. In expensive parts of the country many families will find these rents unaffordable. If they rely on Housing Benefit then despite the rhetoric the nation’s Housing Benefit bill increases by £1.2bn. Of equal concern is the misnamed ‘Affordable Rent’ model This is a short-term policy because of the way in which it depends upon housing associations loading up on debt, sweating its assets. It limits the length of time in which it can finance development. Even the housing associations with the healthiest balance sheets tell me that by 2014 they’ll have exhausted this model. The government must be looking now at the hole in finance and how a complete collapse in affordable building can be prevented.
The New Homes Bonus is the government’s flagship policy to boost supply. However, the government’s own impact assessment indicates that for the billions of pounds that it will cost, it will only boost supply by some 14,000 units a year –short of their pre-recession levels. Research by my office also shows how the bonus, paid for by cutting the main revenue support grant to local authorities and paid out in a way which benefits wealthier areas more than deprived areas, will, as Channel 4 News put it see “care cut in Salford to pay for executive homes in Surrey”. That is no way to seek to increase housing supply.
The sunny rhetoric used by the government is less in evidence these days but there has been no sign of ministers deciding to change course from the direction that they are taking housing policy in at the moment. There are three and a half years until the next general election and a lot can change in that time. Labour is undertaking its own policy review with an eye on developing a housing policy with more long term potential and more positive outcomes than those being pursued by this government.