Report endorses role of housing body but recommends offloading Help-to-Buy and building safety responsibilities
The Department for Levelling Up Housing and Communities (DLUHC) should authorise Homes England to “take more risk” to deliver more impact, according to a Cabinet Office review of the agency.
A public body review published today endorsed Homes England’s role as the key delivery agency for housing and regeneration but urged the government to give it backing to “be even bolder” by playing the role of master developer on more large regeneration and placemaking schemes.
To enable this, the review, led by ex-PwC consulting boss Tony Poulter, recommended changes to funding arrangements in the next spending review to allow Homes England to commit to large, long-term schemes.
The non-departmental public body that funds new affordable housing in England was among 40 arms-length organisations chosen for “routine review” as part of the Public Bodies Review programme in June last year.
While it has been the subject of three separate internal reviews in 2020, Homes England has not been fully and independently reviewed since 2016, when it was known as the Homes and Communities Agency.
If adopted, the report’s recommendations would further entrench Homes England’s move away from a “purist” focus on housing supply and towards regeneration, which was announced in the body’s new five-year strategy last May.
The review that some of the organisation’s historic responsibilities should be reallocated to enable it to focus on this new brief, including its oversight of the Help to Buy Scheme.
While the scheme itself is no longer in operation, Homes England’s delivery of it has meant that it is now the sixth largest mortgage lender in the country.
Poulter, who is also a board non-executive at the Department for Transport, told Housing Today: “Homes England’s not doing anything to further new house building through Help to Buy at the moment because the scheme is closed.
“I’m not saying it’s not important. Someone’s going to look after that mortgage book but it’s for government to say, ‘do we want to stretch Homes England to do it?’ Or could we get a private sector entity to do it or some other bits of government to do it?
“I don’t think it’s the best use of Homes England’s expertise.”
It also recommended offloading the agency’s building safety responsibilities. Homes England currently delivers or supports delivery of a number of remediation schemes including the Cladding Safety Scheme.
To compliment a more hands-on and place-based approach to its role, the review suggested Homes England “develop its operating model to focus its work as much on places as on national funding”, urging it to “build closer relationships with priority local authorities”.
The body was also advised to develop clear objectives and outcome measures for each priority area in discussion with local partners.
In the past five years, the agency’s work has supported the development of more than 186,400 new homes, unlocked land that could deliver close to 400,000 additional new homes and helped more than 252,500 households into home ownership.
However, recent years have seen Homes England struggle to meet targets for its £11.5bn affordable homes programme.
The scheme was originally expected to deliver 180,000 homes by 2026 but the National Audit Office said in September 2022 the actual figure would be 23,000 lower and Homes England subsequently revised it down further to 157,000.
The report found that there was “strong evidence” that market issues, caused in part by the effects of the pandemic, were the most important underlying factor explaining Homes England’s under-delivery, although it did set out some criticisms of the design of DLUHC’s funding programmes.
It suggested that more flexibility be built into future programmes to allow an effective response when market conditions change.
While the review made a total of 35 recommendations for DLUHC and Homes England, it gave an overall endorsement of the body’s role.
It concluded that there was “no evidence that its main functions could be delivered fully by the private sector, a different tier of government or another public body”.
Homes England chair Peter Freeman welcomed this conclusion as well as the recommendations for improvement and development.
“Much of this work is already happening,” he said. “Other recommendations will require changes in partnership with the DLUHC and Treasury but if progressed could be transformational in how we deliver new homes and create thriving places.
“While there is much to celebrate, we are steadfast in our resolve to always improve, ensuring that we are effective and efficient in driving forward the country’s housing and regeneration ambitions.”
Michael Gove, secretary of state for housing, also welcomed the report and said his department would “work closely with Homes England to finalise an implementation plan”.
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