How can councils secure the delivery of more affordable homes?

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It’s time to take the brakes off councils so they can deliver the affordable homes and communities we need, says Town & Country Planning Association chief executive Kate Henderson

The start of 2018 has been action-packed on the political front, with four significant housing and planning announcements.

First, we’ve had the appointment of a new housing and planning minister, with Dominic Raab replacing Alok Sharma in the reshuffle. There were clear gasps of despair across the built environment sector about how short-lived Sharma’s tenure was – although not unusual for a housing and planning minister – and while the lack of continuity is frustrating, there is no time to waste in building a positive relationship with the new guardian of housing and planning policy.

Second, along with the reshuffle, the prime minister announced a new housing ministry – the Department for Communities & Local Government is being rebranded, and refocused, as the Ministry of Housing, Communities & Local Government. This reflects the emphasis and personal commitment that the prime minister is placing on housing.

Third, we now have a new government housing agency called Homes England (replacing the Homes & Communities Agency), tasked with a bold agenda of innovation and delivery.

The fourth is the launch a new All-Party Parliamentary Group (APPG) on New Towns. Chaired by Lucy Allan, MP for Telford, the APPG will consider the successes and failures of existing new towns in order to learn from past mistakes and help shape future government policy. The TCPA will act as the APPG secretariat, which will include providing expert knowledge on new towns and garden cities.

The government’s emphasis on housing comes as no surprise. There were strong signals that housing would be centre stage of the government’s agenda this year when Philip Hammond delivered his Autumn Budget on 22 November 2017.

Perhaps the most positive aspect of the Budget was the chancellor’s announcement of five new garden towns, and in particular the government’s commitment to using New Town Development Corporations where local authorities or groups of authorities want them. The TCPA welcomed this announcement but highlighted to government a key lesson from the past: that success depends on national and local government doing their homework on the right locations for new towns. While the chancellor did specify that new garden towns would be created in high-demand areas such as the South East, he didn’t announce where they would be located. New towns can’t be produced like a rabbit out of a hat; they require an expert process of site selection, real community engagement and a long-term commitment to the highest-quality design standards on everything from accessibility to climate change.

While the commitment to modernising the New Towns Act was a major success for the TCPA’s garden cities and new towns campaign, elsewhere the Budget failed to give councils the powers or the funding that they need to tackle the housing crisis. The government needs to invest significantly more in genuinely affordable homes and be far bolder in its support for councils if it is to meet the ambition to deliver 300,000 new homes a year, according to our major new study, funded by the Nationwide Foundation.

Through running seminars, pilot workshops and producing case studies throughout 2017, we found that councils right across the country can and want to do much more to tackle the housing crisis in their local authority areas, from direct delivery of social rent homes, new local housing companies and joint ventures through to bringing empty homes back into use and supporting community-led housing.

The study, which involved an online survey of 76 councils, found that 76% already had or were considering setting up local housing companies on their own. A further 56% of these councils already had or were considering setting up local housing companies as a joint venture.

Alongside revealing strong appetite for innovation in delivering new homes, our research highlights that many councils are concerned about their ability to deliver genuinely affordable homes available at social rent levels.

The survey found that social rent is the most in-demand housing tenure among over half of English councils, although in 2016-17 just 5,380 new social rented homes were built in England.

So, while the evidence has shown that there are new approaches to enable councils to build more homes, many of these approaches do not meet the need for genuinely affordable homes at social rent levels.

When asked what would encourage councils to build more affordable homes, 80% of the councils that responded to the survey identified “increasing grant levels” as a priority and two-thirds said that lifting the Housing Revenue Account (HRA) borrowing cap would allow them to build more homes (which the government has done in the Budget, although this is limited to areas with “high affordability pressures”).

Based on engagement with over 200 representatives from more than 130 councils, the report makes a series of recommendations to government, including calling for significantly more investment in homes available for social rent and other affordable tenures if we are to deliver the step change necessary to meet our nation’s housing need.

Alongside calling for a significant increase in funding for affordable housing – and the additional £2bn in the Budget is a welcome start – councils are sending a clear message to government through this research that the HRA borrowing cap should be lifted for all stock-holding authorities to help them maximise their potential as a major contributor for meeting the shortfall in the supply of affordable housing.

If the government is serious about its commitment to deliver 300,000 homes each year, not only should it be supporting the delivery of new towns and garden cities, it must take the brakes off councils so that they can play a more active role in delivering the homes and communities we need.

 

Kate Henderson

Chief Executive

Town & Country Planning Association

Tel: +44 (0)207 930 8903

tcpa@tcpa.org.uk

www.tcpa.org.uk

Twitter: @theTCPA

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