'We've made great progress, time to go a step further in the budget.'
After a very busy few weeks for housing our head of policy Melanie Rees takes a look at each of the priorities we outlined in our budget submission to see how much progress has been made and where there is still work to do.
On 22 September we made our budget submission calling for action in eight key areas.
Just over a month later we’ve seen significant proposals from the government in four of those areas. Not bad going with a few weeks still to go to the budget, or a job half done?
As we approach 22 November it’s worth a look at what has been announced, whether it goes far enough and which areas still need attention.
Priority 1 - deliver more genuinely affordable homes
Our recent analysis showed that of the £51 billion earmarked for housing until 2020/21 just 21% is earmarked for affordable housing – the rest supports the building of private housing.
Well it’s fair to say we have seen some progress on this. Theresa May made the announcement that the government would invest a further £2 billion in affordable housing a key part of her conference speech.
This was certainly very welcome and so too was the commitment to build new social rented homes – something we have consistently called for. But there’s still not a great deal of clarity on how much of the new money will go towards the building of social rents and it’s fair to say though this is a welcome amount it does little to significantly shift the imbalance in total housing investment.
Sajid Javid hinted that borrowing to build new affordable homes could be a possibility but Philip Hammond appeared to quickly shut this suggestion down. It will be interesting to see what, if anything, comes out of the budget in terms of new funding.
Verdict – a good start but we need a bigger commitment if we’re going to build the affordable homes we need
Priority 2 – develop a sustainable funding framework to increase supported housing
This is the area in which we’ve perhaps seen the most tangible progress with the announcement last week that the LHA cap will be scrapped for supported housing, and for all social housing.
It’s fair to say this was a very welcome surprise for many people in the sector. The threat of the LHA cap did enough damage to the provision of supported housing, the reality had it come into effect would’ve been devastating.
Yesterday’s announcement on the long-term funding model was also largely positive – securing the future long-term funding of supported housing and giving the sector the opportunity to have a voice on new long-term plans. But we do share the concerns of some other groups regarding the arrangement for specialist providers of short-term support for homeless people, domestic abuse victims and others who need this crucial type of housing. We’ll be making sure we give a voice to those people in our consultation response.
Verdict – excellent progress in the form of a very pleasant surprise – the sector is in a much better place than it was just weeks ago but specialist providers mustn’t be forgotten
Priority 3 – set a new rent settlement that supports more affordable housing
Here too we’ve seen significant progress with a long-awaited rent settlement for the sector announced in October. From 2020 social housing rents will rise by inflation plus 1% for five years.
We’re a bit torn on this one in truth. On the one hand security over rents is a hugely welcome thing and will allow housing providers to plan the development of crucial new homes and other activity. On the other the idea of rent increases at a time when there are already significant affordability issues for many people is a real cause for concern.
The implementation of this will be key, because one size does not fit all. In our Building Bridges report, published in September, we made the case for a new system of local frameworks to define affordability, including that rents shouldn’t take more than a third of net earnings for those on below average incomes and should not see working households need to claim housing benefit.
We would like to see a much more flexible approach to rents which better reflect the challenges in each area.
Verdict - good news for the sector but the implementation will be key to protect tenants
Priority 4 - maintain effective help with housing costs for those on low incomes
This is absolutely key. A number of welfare policies continue to undermine the government’s commitment to tackle the housing crisis and its progress in other areas. So while the rent settlement is a good thing for the sector, the impact on tenants could be severe given that welfare policies like universal credit and the benefit cap continue to make housing less and less affordable for many people.
The government has to get its act together on welfare urgently if the very positive moves it is making are going to bear fruit.
The budget is a great opportunity to address a number of those issues. The most realistic prospect appears to be universal credit – for which it looks like the waiting time could be cut from six weeks to four. This would be a welcome move but we’d prefer to see the rollout slowed down so that the many glitches with the system can be addressed.
Elsewhere we’d like the lower benefit cap to be scrapped. One year after its introduction we know that this is causing tens of thousands of households significant hardship.
There’s also a bigger issue about the affordability of rents and we know that local housing allowance is out of step with actual rents in many areas. This is something else the government needs to look at urgently.
Verdict – perhaps the biggest and most urgent area for improvement – if government doesn’t get this right then measures to build new homes could be completely undermined
Priority 5 – address poor quality, insecurity and high costs in private renting
Among all of the other news it would’ve been easy to miss a number of very positive proposals to help the millions of people renting privately.
In our budget submission we called for a system of incentives for landlords and the introduction of minimum standards for the private rented sector – both of which the government has proposed to do in some form.
At the Conservative party conference Sajid Javid announced the government will give more rights to private tenants, force landlords to join a redress scheme, incentivise longer tenancies and regulate letting agents.
These are all extremely positive measures which could make life much easier for many private tenants across the UK.
Verdict – real progress but many issues for private tenants can be traced back to welfare policies which aren’t working so we need action on this if the changes are to have a real impact
Priority 6 - provide resourcing for local authorities to build new homes
The government has recognised on numerous occasions that councils will be crucial to get us anywhere near the level of house building we need and it has even promised ‘a new generation of council houses’. But as things stand it feels like we’re still quite a way from where we need to be for there to be a renaissance in council house building.
In our budget submission we’ve asked for targeted support for local authorities to achieve faster delivery of local plans and bringing forward housing development sites. We’d also like to see the government let councils keep 100% of right to buy receipts and a new framework for councils to bid for increased flexibility around rent levels and borrowing caps in return for concrete commitments to build new homes.
Verdict – we’ve seen big promises on support for councils, but we’re still a long way from where we need to be if we’re really go to see significant new building
Priority 7 – tackle homelessness and rough sleeping
The Homelessness Reduction Act represents huge progress and the government has already expressed its support for Housing First so we have made some progress in this area. But the fact homelessness continues to grow shows you that we are a million miles away from a solution.
Homelessness is nothing short of a national disgrace and it needs to be treated as such. It is simply unacceptable that we have so many people sleeping on our streets and without access to a decent home.
The government has to commit to support local authorities to meet their new duties under the Homelessness Reduction Act – beyond what has already been proposed. It must also provide real support for a wider Housing First programme with an aim of halving rough sleeping between 2022 and 2027. And it must look at how it can shield those at risk of homelessness from benefit sanctions – which our own research shows is a key reason many people are being refused a home.
What we really need is a cross-departmental government strategy which takes into account and tackles all of the causes of homelessness.
Verdict – a huge problem to solve needs huge attention. Government has made a start but we need a cross-departmental commitment on this if we’re really going to solve the problem. We did it before, we can do it again.
Priority 8 - invest in existing homes
This is very much a case of last but by no means least. The tragedy at Grenfell has rightly brought into sharp focus a number of issues around the on-going maintenance and refurbishment of existing homes. In our efforts to build much-needed new homes we mustn’t lose sight of the need to maintain high standards in existing homes.
We need focused additional funding for this and we also need the government to give targeted and additional support to help landlords address remedial works to ensure buildings are safe after Grenfell. This could take different forms from direct government investment to revolving loans.
Verdict – a key issue we must not lose sight of and which government must keep in mind
Melanie Rees is head of policy at the Chartered Institute of Housing.