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Jumping through hoops means the housing crisis circus will continue

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LGC’s essential daily briefing.

From roads peppered with potholes and choked with traffic to overcrowded (and often delayed) trains, crumbling buildings to contaminated land – this country’s housing crisis should never be viewed in isolation.

The associated infrastructure that is needed to support the extra homes the country hopes to build, and is already building, is arguably even more important than the properties in which people will end up living in. If people find it hard to commute to and/or from an area to one of these homes, or struggle to secure school places for their children, get a GP appointment, or dare to enjoy themselves in some shops, bars and restaurants then there’s not much of an incentive to make people move somewhere if the necessary infrastructure does not exist.

So it was good news when, in the 2016 autumn Budget, that chancellor Philip Hammond confirmed he would be introducing a pot of cash that could be spent on helping to provide much-needed infrastructure that would kickstart some development sites that had been dogged by associated infrastructure issues.

At the time the Local Government Association’s chief executive Mark Lloyd said the housing infrastructure fund, along with a delay to the implementation of the forced sale of higher value council homes, was “a move in the right direction”.

While it was a move in the right direction, the home building fund was not considered a solution to the housing crisis even back then.

Today LGC’s sister title Construction News has revealed how the cash the government said would “unlock a pipeline of up to 200,000 homes” is actually on course to deliver 50,000 fewer homes than originally intended.

The Ministry of Housing, Communities & Local Government said the fund had already “made significant progress in contributing to increasing housing supply across the country” - 68,240 homes are expected to be delivered from £894m of loans already issued - while Homes England said the 200,000 estimate was a goal rather than a prescriptive target.

That all may well be the case but a 25% decrease in numbers is still a significant loss for a single scheme.

To be fair, the government has since announced further pots of funding with a view to helping the country get to a point that it’s consistently building 300,000 new homes every year by the middle of the next decade.

There was the extra £2bn for social housing, for example, which Theresa May coughed up (literally) during her infamous Conservative speech last year – that money could deliver “up to” 25,000 homes for social rent in areas of highest housing need. But even back in October LGC was reporting how the cash would not deliver that number of homes, due in no small part to the costs associated with building in London.

Then there was the extra £1bn borrowing for councils to build homes, only LGC found the Treasury was banking on there being a lack of interest in this offer so it has actually set aside £120m less than was billed – such tactics will also mean fewer homes will get built.

There are a great many more different pots of funding councils, housing associations, and private developers can now bid for a share of to try and get more homes built but, as today’s story illustrates, these rarely deliver exactly what was proposed. 

The pots of cash themselves always sound significant - £2bn here, £1bn there – but in reality these do not result in a major step-change in the number of homes developed each year. Only by giving councils the freedom to borrow more for housing will that be achieved.

Judging by his appearance at the District Councils’ Network last week, housing and communities secretary Sajid Javid understands that but he urged the sector to bid for the extra borrowing capacity announced in the last Budget and use up its existing £1.5bn headroom in the housing revenue account first. Doing that will “help make a difference” in getting his colleagues in other parts of the government to understand the significant role councils can play in tackling the housing crisis once they see what they can deliver, said Mr Javid.

Until then local government is left jumping through hoops when what it, and the country, really wants and needs is to be putting spades in the ground.

By David Paine, acting news editor

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