Spending Review 2020: What does the sector think?

The housing sector has responded to yesterday's Spending Review, which featured announcements for housebuilding, infrastructure, and rough sleeping.
Announcements in yesterday’s Spending Review included a new £7.1 billion National Home Building Fund and a £4 billion Levelling Up Fund. Stock image from Pixabay.

The housing sector has responded to yesterday’s Spending Review, which contained announcements on funding for house building, infrastructure upgrades, and rough sleeping.

Announcements made by the chancellor Rishi Sunak as part of the one-year Spending Review included the £7.1 billion National Home Building Fund, a £4 billion Levelling Up Fund, and £254 million of additional funding to tackle rough sleeping.

The National Housing Federation welcomed the Spending Review’s apparent focus on house building and ‘levelling up’, saying these themes ‘came through strongly in the Spending Review’.

Kate Henderson, chief executive of the NHF, said: “The £7.1 billion National Home Building Fund, alongside the £12 billion announced through the Affordable Homes Programme, will help reduce the current shortfall of 4 million homes, as well as stimulating the economy and creating local jobs.

“It’s also encouraging to see new money for retrofitting social homes which is vital to helping us achieve our environmental targets.

“We welcome additional investment to help reduce rough sleeping, and the commitment that housing benefit will remain at current rates, ensuring people on low incomes can better afford private rents. However we are concerned that there is still no confirmation that the £20 a week top up for Universal Credit will continue past March 2021, with many dependent on this income.

“Whilst funding for the building safety regulator is welcome, it is disappointing that the government has not taken this opportunity to provide up-front funding for the removal of cladding to ensure that buildings can be made safe as quickly as possible.”

Melanie Rees, head of policy and external affairs for the Chartered Institute of Housing, echoed the praise for £254 million of extra funding to help local authorities end rough sleeping and prevent homelessness in England.

However, Rees called for a holistic approach to homelessness, echoing the HCLG Committee’s call to make far more homes available for social rents.

“What we urgently need to see is investment for 90,000 new homes at social rents each year, realistic help with housing costs for those who need it and good quality housing support services,” Rees said.

“Investing in new social rented homes would not only help to address homelessness and meet housing need, it would also boost the economy and create much-needed jobs. We will continue to make the case for this to government.”

Housing associations outside the South of England are understandably eyeing the £4 billion Levelling Up Fund which will invest in local infrastructure projects up to £20 million.

The fund will be open to bids from all local areas in England, prioritising bids from ‘places in need’ or areas that have received less recent government investment.

Tracy Harrison, chief executive of the Northern Housing Consortium, said: “The levelling-up fund is important for the North because historically, the region has been excluded from accessing the lion’s share of some big funding pots.

“However, this competitive bidding fund, limited to projects of £20 million, will need to be aligned with Green Book reform and mainstream investments such as the Shared Prosperity Fund and National Home Building Fund, if it’s to result in the step-change we all want to see.”

Lee Bloomfield, chief executive of the Bradford-based Manningham Housing Association, raised concerns about the bidding element of the Levelling Up Fund.

“The £4 billion Levelling Up Fund is to be welcomed, but this money must be fairly and openly allocated on the basis of genuine local need, not as a means of further benefiting parts of the country that are already well resourced.

“Some of this money could support the construction of more affordable homes including larger family properties, the lack of which has had hugely damaging health effects on those forced to live in overcrowded conditions.

“Community-based organisations such as MHA stand ready to work with the government to offer guidance on where we believe the new spending commitments can deliver the most positive results.”

Victoria Hills, chief executive of the Royal Town Planning Institute, welcomed the headline funds but raised concerns about the ‘bidding culture’ of the announcements, saying this would impact long-term planning.

“In our white paper response, we called for the introduction of Green Growth Boards to deliver joined-up strategies for climate action, infrastructure, housing provision, health and nature recovery on a regional level,” Hills said.

“Local authority planning departments have seen a 42% reduction in funding over the past decade, which has had implications not just for efficiency or process. The £12m announced by the chancellor today is woefully inadequate and fails to recognise the vital role the UK planning system plays in the economic recovery post-COVID.”

While the Spending Review provided further funding for councils, including new funding for social care, the Local Government Association (LGA) warned that local authorities will still face pressures as a result of the COVID-19 pandemic.

James Jamieson, chair of the LGA, said: “Overall, the Spending Review provides more certainty for councils next year but the long-term outlook remains unclear. Public finances will undoubtedly be under huge strain in the years ahead but investment in our local public services is critical to our national recovery next year and beyond.

“Only with the right funding and freedoms, can councils lead local efforts to level up the stark inequalities the pandemic has exposed and level up the economy so that it benefits everyone.”

One of the more critical responses to the Spending Review came from the Federation of Master Builders, who said it was ‘unacceptable’ that Sunak’s speech did not mention low carbon homes or green jobs.

Brian Berry, chief executive of the Federation of Master Builders, said: “We cannot meet our net zero carbon targets without improving the energy efficiency of our homes and moving to low carbon heat sources.

“Failure in this Spending Review to commit to a long-term retrofit strategy or to bring forward the £9.2 billion promised in the Conservative manifesto will set the country back. Acknowledgement of the need to retrofit is one thing, but a plan must follow.”

Shelter were also critical in their response to the Spending Review, saying that it offered ‘barely any hope’ for struggling families facing a dire economic outlook.

Polly Neate, chief executive of Shelter, said: “The chancellor talked about the importance of home, but with no new money or urgency to build the social homes that so many are desperate for. Nor was there any reassurance that the welfare safety net will be there for people in their time of need.

“In fact, a red flag hidden in the small print suggests the government will freeze housing benefit next year, amounting to a real-term cut for families battling to keep up with their rent. 

“This was a missed opportunity to tackle our out-of-control housing emergency. You cannot defeat rising poverty or homelessness with courage alone.”

Crisis, however, were more positive, saying the additional financial support will help ensure that people aren’t left stuck on the streets.

Jon Sparkes, chief executive of Crisis, said: “We’ve seen through the ‘Everyone In’ scheme that with the right support, people can leave homelessness behind for good, and this funding ​will get us even closer to the government’s commitment to end rough sleeping by the end of its term.

“We look forward to more details about how this new money will be allocated and spent, and what this will mean for people on the ground.

“To ensure we use this as a springboard to ​truly end rough sleeping and achieve lasting change in how we tackle homelessness across the country, ​this needs to go hand in hand with ​a commitment to roll-out Housing First nationally in England.

“We also need to look to other policies that will help prevent homelessness, such as maintaining the lift in housing benefit rates announced earlier this year so it continues to cover the cheapest third of rents.”

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