“A senior Whitehall official said (to the Financial Times) there was growing pressure inside the Ministry of Housing, Communities and Local Government for ministers to accept that hitting the 1.5 million home target was unattainable in this parliament.”
S/he added
“Everyone can see that any serious line-by-line analysis of how you could reach that target would not stand up to outside scrutiny,” the person added.
Everyone, nonetheless, except the Ministers, it would seem. Where the “senior Whitehall official” works is unknown, though it wouldn’t be a long bet that it was the Treasury. At any rate talking to the FT is unlikely to be the result of a maverick civil servant. It seems likely that this intervention reflects differences within the government. But, do the Ministers have doubts themselves?
“Delivering 1.5 million new homes is going to be more difficult than we expected in opposition,” Pennycook told the House of Commons Housing, Communities and Local Government Committee. “On assuming office, we discovered that the situation was even more acute than we had expected.”
Whilst he expressed “confidence” in reaching the target he sounds like a football club owner expressing confidence in the manager.
“Pennycook blamed “anti supply” changes to national planning policies in the final year of the Conservative government for worsening the downturn in supply, mainly caused by high interest rates. He also emphasised the barriers to meeting the target including construction capacity, an ageing workforce and planning authorities that have been “hollowed out [by] budget cuts”. “I would just reiterate . . . what a dire situation we’re in, in terms of the collapse in supply and particularly affordable supply,” he said.”
He said some local authorities that had been “dragging their heels” on housing were “suddenly making very, very quick progress” to pass local plans that would lock in the old targets before the new policy came into force.
The problem is that this arbitrary national target is tenure blind. The numbers they are imposing on councils are tenure blind too. The government has no target for council or housing association homes. It can have some control over the number of ‘social’ homes built because they can provide funding for x number of homes (whatever they decide). In contrast it has no control over the market. The large volume builders will only build on a scale and at a pace which maximises their returns. One might say that “everyone can see”, except for Ministers, that social rent homes should be the government’s first priority.
The biggest obstacle to maximising social rent homes is the Treasury and the economic approach of the Chancellor. But the Ministers have not spelled out clearly what tenure breakdown they want. In fact they are proposing to maintain the very same definition of “affordble housing” as the Tories. Not only does this include”affordable rent” (80% of market rent) introduced by the coalition, and various forms of “affordable home ownership”, but even “affordable private rent”.
There is a wide range of organisations pushing for social rent homes rather than the various “affordable” options. In the run-up to the Spring Spending Review the key demand will be for 90,000+ social rent homes, that Shelter and many organisations are demanding. This is what we need, not “affordable housing”. That requires sufficient government grant. The market won’t build it.
Labour Campaign for Council Housing 