The Budget: a little bit for everything and quite a lot in some areas

The largest funding package for housing in the last decade was unexpected.

This was the first budget since October 2018, and was anticipated to see out a vision for this Parliament and beyond. Although hardly mentioned in the Johnson manifesto, there were hopes that the budget would accept the economic case for significant investment in affordable housing, and particularly for the North, as part of the levelling up agenda.

Early signals suggested that home ownership would get strong support, potentially to the detriment of traditional social housing, through initiatives like First Homes. An appetite for building on the green belt and further planning reform was also trailed, as was the possibility of housing being included in a national infrastructure strategy.

There was also reference to the quality of new homes in the Government’s endorsement of the Building Better Building Beautiful Commission. Plus some commitments on homelessness and ending rough sleeping and the re- appointment of Dame Louise Casey to advise Government on the issue.

The combined efforts of housing bodies across the country including the National Housing Federation, Local Government Association and Shelter were clear on two big asks, more investment in housing, specifically, a 10 year settlement at £12.8 billion per annum for an expanded affordable homes programme; and a Building Safety Fund to meet the costs of cladding removal and remediation for those homes affected by the aftermath of the Grenfell Fire tragedy. Labour had pledged £2billion in their manifesto.

The National Housing Federation had also asked for place based funding and a social housing decarbonisation fund, recognising the emerging challenge for both new and existing homes in meeting climate change targets.

There was a worry that Coronavirus might put on hold government’s announcements of its longer term economic plans, saving it for the spending review later in the year. However, what we saw, perhaps surprised us all.  A little bit for everything and quite a lot in some areas.

The Affordable Homes programme has been expanded with a new, multi-year settlement of £12bn of grant funding from 2021-22 to build affordable homes across England. The largest programme since my time at the Housing Corporation over a decade ago.

There is a Building Safety Fund, with an additional £1bn to remove unsafe cladding from residential buildings above 18 metres tall, on top of the £600 million already announced.

Almost £650m of funding will be made available to help rough sleepers into accommodation, to be funded by a stamp duty surcharge on non-UK residents, worth 2%, coming in from April 2021. £400m was announced for Mayoral Combined Authorities and local areas to establish housing on brownfield land across the country.

£1.1bn of allocations from the Housing Infrastructure Fund will be committed to build nearly 70,000 new homes in nine high demand areas across the country. Initial ones announced are all in the North.

And there is something for local authorities, with a reversal of the previous interest rate hike for local authorities investing in social housing by 1%, and making an extra £1.15bn of discounted loans available for local infrastructure projects. 

Later today we are told to expect announcements on comprehensive reforms to planning by Robert Jenrick, the Secretary of State. Many will say correctly,  that the money is not enough. After all, it is only a third of the ask for the affordable homes programme and we don’t know what proportion will be for much needed social rent homes; and the bill for cladding removal and remediation is expected to be in excess of £8 billion in London alone. 

However, as a wide ranging package of interventions, it speaks much closer to a Theresa May/ turn of the millennium Labour Sustainable Communities plan of action than many might have anticipated. Keynesianism and fiscal stimulus, are suddenly key words that few expected to hear mentioned alongside this Conservative Government.

Steve Douglas CBE – Aquila Services plc and former CEO of the Housing Corporation – the predecessor to Homes England.

As published on Housing Today.