The government should ‘level up’ the Treasury’s Green Book to redirect housing investment to the North of England and support the national recovery from COVID-19, a new report has found.
The report by Homes for the North (H4N), an alliance of 17 Northern housing associations, finds that the North is missing out on major housing investment due to the Green Book, which helps decide where public funds should be invested to drive economic development.
The research, undertaken by the Centre for Economics and Business Research (Cebr), warns that the North of England could fall behind other regions of the UK if it lacks the funding to deliver new homes and retain its workers.
Paul Fiddaman, chief executive at Karbon Homes and H4N member, said: “Our latest research reinforces that the current approach to housing investment is skewed against the North, which prevents the region from accessing vital funding to deliver more quality and affordable homes.
“Delivering more homes in the right places will revitalise communities and economies across the North of England.”
The research finds that the current method for distributing housing investment fundamentally disadvantages the North by channelling investment to areas where affordability pressures are highest – these being mostly in London and the South East of England.
In 2017-18, the North received just 17.8% of housing funding across the UK, while only four of 72 local authorities in the North are eligible to access 80% of key housing infrastructure funding under Homes England’s so-called ‘80:20’ rule.
For example, just 9.9% of the Housing Infrastructure Fund (HIF) Forward Fund has been committed to the North so far, the report found.
H4N has called for the government to remove the ‘80:20’ rule and replace it with a new funding allocation method that aligns more closely with regional growth strategies such as the Northern Powerhouse and the ‘levelling up’ agenda.
Other recommendations made by H4N in its report include creating a more meaningful housing strategy for the North, prioritising funding for projects that most need it, and using a wider, more forward-looking range of criteria to appraise housing projects than just Land Value Uplift (LVU), such as tackling climate change or impacts on quality of life.
“Housing has an important role to play in supporting the Government’s levelling-up agenda and an inclusive national recovery,” Fiddaman added. “A new approach to the distribution of housing investment is urgently required to enable the North to deliver more quality, affordable homes and close the gap with the South.”
In the Budget earlier this year, the government announced that the Treasury plans to undertake a review of the Green Book. HM Treasury has been approached for comment.