Joint spending review submission from groups representing 75 housing associations and councils calls for consolidation of funding pots and reclassification of housing investment as infrastructure spend
The government should overhaul housing funding by consolidating grant into just two pots and reclassifying spend on homes as infrastructure, according to regional groups representing a total of 75 social landlords.
Six groups of social landlords operating in the devolved regions across Yorkshire, Greater Manchester and Merseyside, along with Homes for the South West, have come together for the first time to produce a joint submission to government.
The housing partnerships (see box below), which collectively own or manage more than 1.7 million homes, are calling for “long-term investment” in the June spending review to “accelerate housing delivery, enable sustained economic growth, and create lasting prosperity.”
The groups are calling for the current “cocktail” of funding programmes for affordable housing to be simplified into just two pots – one for building new homes and one for improving existing homes.
Working together: The regional housing groups who have drawn up the joint submission
The seven regional housing partnerships have 131 members altogether, but some providers have overlapping memberships as they operate in more than one region, meaning there are 75 different organisations represented.
The providers collectively manage around 1.7m homes, which is around a quarter of England’s social housing stock.
Greater Manchester Housing Partnership Comprises 24 housing providers in Greater Manchester managing 260,000 homes across the region.
Liverpool City Regions Housing Associations Group an alliance of 16 housing associations working across the Liverpool City Region.
Hull and East Yorkshire Housing Partnership In its “formative stage” - 24 housing providers operating in Hull and East Yorkshire they manage more than 48,000 homes in the region.
South Yorkshire Housing Partnership Made up of 15 members, including 11 housing associations and four stock-holding local authorities managing 127,000 homes
West Yorkshire Housing Partnership Made up of 15 members, including 13 housing associations and two stock-holding local authorities managing 167,000 homes
York and North Yorkshire Housing Partnership Made up of 25 members, including 23 housing associations and two stock-holding local authorities, managing 46,000 homes
Homes for the South West A coalition of the region’s 12 largest housing associations
Nick Atkin, chief executive of Yorkshire Housing, who has spearheaded the submission, told Housing Today : “What this would enable us to do is to have more of a coordinated and more of a long-term approach to things like decarbonisation, building safety and sustainability.
“At the moment, complexity of funding is slowing down the delivery of new homes, and it’s also slowing down how we improve our existing homes.”
The new build pot would combine streams such as the Affordable Homes Programme, Housing Infrastructure Fund and Brownfield Infrastructure and Land Fund, while the home upgrades pot would put Decent Homes, and funding for decarbonisation and building safety together to create a ”more cohesive and streamlined approach to housing upgrades.”
The aim is to remove bureaucracy and prevent difficulties caused by having short-term deadlines for different funding pots.
Atkin said: “The problem with those individual funds that are time-limited is they create inflation in terms of the supply chain.
“So, [for example] everybody is looking for air source heat pumps at the same time, so unsurprisingly the price goes up and there is only a finite amount of labour, so the people who could fit those types of green technologies start charging more.” Atkin said this has got to the point where in some cases this it cost more to upgrade the homes within the funding programme as opposed to doing it without government funding. “That’s a crazy use of public money”, said Atkin.
The benefits of devolution and a collective voice: why do a joint submission?
Nick Atkin, chief executive of Yorkshire Housing said the idea of a joint submission began with the Yorkshire partnerships and then expanded from there.
“We recognise that devolution at the heart of the government’s plans for not just economic growth, but also for where housing goes,” he says, adding that the submissions have all been shared with the respective mayors in the regions.”
He said the reclassification of investment as in housing as infrastructure spend, for example, has been quite a “strong topic of conversation” across all four housing partnerships in Yorkshire.
“There were a lot of similarities, a lot of themes, so we quickly realised that while we could have put in four responses [one for each Yorkshire partnership], we’d be saying pretty much the same thing, albeit just with different words in different places.”
Atkin said they realised also that providers on the other side of the Pennines in Manchester and Liverpool had also been researching and thinking about the same ideas and then Homes for the South West expressed interest.
“Homes for the South West said ‘the things you are talking about here are absolutely the things we’ve been talking about and we think it would give us more influence if we had a collective voice on these issues’” he said.
Atkin stressed the joint submission was not set up because the providers disagree with what the National Housing Federation or Northern Housing Consortium say and added the partnerships’ paper is complementary to what other groups are doing.
The short-term cycles governing current funding programmes, are, according to the housing partnerships causing “countless smaller sites” to remain “stuck in limbo”.
The seven housing partnerships want the government to reclassify housing investment as infrastructure spend in a bid to attract investment over a longer period, saying this would be a “game changer for the government’s growth agenda”.
They say that while government spending reviews occur every two to three years and Affordable Homes Programmes span a few years, larger developments require longer timeframes to plan and compete, so there is a mismatch which leads to a “stop-start approach”.
“If you look at housing starts and completions in England they invariably peak and trough”, says Atkin.
“What we are saying is that, instead of having that rollercoaster, that boom/bust cycle, why not do what we do for other infrastructure projects like rail or road and say we are going to have a 10-year plan?”, he said.
“That stability also unlocks larger strategic sites”. Atkin said that this reclassification of housing spend as infrastructure, along with a simplified funding model and a 10-year rent settlement, would enable “everybody to commit to larger projects”.
The submission also calls for more flexibility over regeneration and renewal funding, a 10-year rent settlement, rent convergence, enhanced support to meet the new Decent Homes standard and a new Right to Buy model, under which tenants receive a fixed incentive to buy a different home to the one they rent.
Key recommendations at a glance:
Streamlined funding model Simplifying the current ‘cocktail’ of funding streams into two clear categories – one dedicated to building new homes and another focused on investing in existing homes.
Reclassifying housing spend as infrastructure Such a shift would allow for more efficient and effective use of funds, supported by the long-term certainty such classification brings.
Higher grant rates for new development Grant rates to reflect local circumstances, rising development costs, and the additional expense of building low-carbon homes.
Greater flexibility and additional funding for regeneration and renewal More funding should be made available for improving existing areas – as solving the housing crisis requires a dual focus – revitalising existing towns in addition to creating new ones.
Long-term rent certainty and the reintroduction of convergence A long-term rent settlement with a convergence mechanism to allow housing associations to gradually increase rents that are below the formula rent.
Grant funding for changes to the Decent Homes Standard The new Decent Homes Standard must be backed by adequate financial support to empower housing associations to meet these new standards and continue delivering high-quality housing.
A new Right to Buy model The policy should be altered so that, instead of allowing residents to buy the home they live in, they are instead offered a fixed monetary incentive which tenants can use to purchase a property on the open market or through affordable home ownership schemes such as Shared Ownership.
Source: Spending review submission paper from the seven regional housing partnerships
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