The first budget of Andy Burnham’s government was delivered by John Healey this week, a budget that was promised to deliver for the working people of Britain. Leading announcements included the extension of the zero rate of VAT on household electricity, a £100 winter fuel payment and a number of measures to further fiscal devolution, such as mayors keeping 20% of business rates from April 2027. The political response has been mixed, with Burnham’s opposition claiming the budget unveiled a number of small-scale efforts rather than addressing the root cause of the countries economic struggles.
But what was in the budget for social housing? The responses from sector leaders have been mixed, with many praising the announcement of a further £1.5Bn of funding for the government’s Social and Affordable Homes Programme (SAHP), but concerns remaining over long-term flexibility and development viability.
£423m was also announced to further tackle rough sleeping, ahead of the government’s “everyone in” scheme this Christmas. Burnham’s government has made clear its leading goal of ending rough sleeping, something the Prime Minister also made his leading cause during his time as Manchester Mayor. Although the funding is welcome, frontline homelessness services voiced similar concerns as social housing leaders in terms of long-term support and a strategic vision to tackle the issue.
Fiona Colley, Director of Social Change at Homeless Link commented: “The extra funding to end rough sleeping confirmed today is a welcome demonstration of the scale of ambition this Government has on ending homelessness. Now, to turn that ambition into action, homelessness prevention and long-term thinking must drive policy choices across Government.
“We need a sustainable funding system that empowers the people working in services ending and preventing homelessness across the country to scale up their efforts.
“The Value for Money Review of homelessness funding is an opportunity to start prioritising homelessness solutions, which we know work: wraparound support, expanding Housing First provision, investing in high-quality supported housing, moving towards a housing-led approach and, critically, putting prevention first.
“Although the Budget gives us a good platform to build on, and all measures to reduce the cost-of-living are welcome as preventative tools, the Chancellor missed an opportunity to act to meaningfully prevent homelessness, including by failing to unfreeze Local Housing Allowance rates.
“Taken in the round however, the promised funding and the positivity of the Prime Minister’s Rough Sleeping Summit on Monday speak to a generational opportunity to turn the tide on unacceptable levels of homelessness. Homeless Link and all our members will be relentless in working with all branches of Government to ensure we take that opportunity.”
The government also announced VAT relief for land made available for the development of social housing, a welcome announcement that drew positive reactions from the sector. Although VAT relief will undoubtedly aid in the development of social housing, there is still widespread concerns around the capacity of local councils to deliver the rate of council housebuilding needed. Shelter has repeatedly called for the cancellation of the HRA debt facing councils following the 2012 self-financing agreement, an agreement it argues has since been undermined by surrounding economic and policy changes, but the budget yielded no such result.
There was also some frustration at the lack of mention of LHA rates, which has been a long time concern of the sector. LHA rates have remained frozen for a number of years, with rents rising by an average of 23.3% since the rates were last updated. Gavin Smart, chief executive of the Chartered Institute of Housing, said: “The freeze on Local Housing Allowance will continue to place pressure on housing services and risks undermining efforts to help people off the streets. The housing sector is ready to deliver, but more work will be needed to reduce the use of temporary accommodation, support those with additional needs and improve the energy efficiency of existing homes.”
Other relevant announcements from the budget include the scrapping of BNG requirements for brownfield land up to 1.5 hectares, cheaper borrowing for councils for housebuilding, and a further £100m aimed at tackling the construction skills crisis. Although the budget contained a number of announcements that will fall on welcome ears, key policies called for by the sector were omitted, and much of the budgets critics have accused it of shying away from the true scale of the challenge facing Britain both in housing and a broader economic sense.
