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Chancellor Announces £15.3 million financial support for housing 23/11/2017 Labelled as Development, Finance, Regulation

The Chancellors Autumn Budget announced on 22 November included a package of new measures aimed at raising housing supply to 300,000 homes per year by the end of this Parliament through:

 

  • A package of £15.3billion of new financial support over the next 5 years.

 

  • Further reforms of the planning system to bring forward more land for housing and make better use of underused land in urban areas.

 

  • Provision of £204million of funding for innovation and skills in the construction sector.

 

The government will strengthen the powers of the Homes and Communities Agency (which is to be renamed Homes England) to use investment and planning powers to intervene more actively in the land market and announced a package of investment funding to include:

 

Land Assembly Fund - The government will provide £1.1 billion for a new Land Assembly Fund. The fund will enable Homes England to work alongside private developers to develop strategic sites, including new settlements and urban regeneration schemes.

 

Five New garden towns - The government will bring together public and private capital to build five new garden towns, using appropriate delivery vehicles such as development corporations, including in areas of high demand such as the South East.

 

Housing Infrastructure Fund - The Budget commits a further £2.7 billion to the competitively allocated Housing Infrastructure Fund (HIF) in England. This takes the total investment in the HIF to £5 billion.

 

Small sites: infrastructure and remediation - The government will provide a further £630 million through the NPIF to accelerate the building of homes on small, stalled sites, by funding on-site infrastructure and land remediation.

 

Home Building Fund - The Budget announces a further £1.5 billion for the Home Building Fund, providing loans specifically targeted at supporting SMEs (Small & Medium sized Enterprises) who cannot access the finance they need to build.

 

Housing guarantees - The government will explore options with industry to create £8 billion worth of new guarantees to support housebuilding, including SMEs and purpose built rented housing.

 

Strategic planning & Housing deals - The government will support more strategic and zonal planning approaches through housing deals in the South East, where housing need is at its most acute. As a first step, the government has agreed a housing deal with Oxfordshire, part of its wider strategic investment in the Cambridge-Milton Keynes-Oxford corridor - including £30 million a year for infrastructure and further support for affordable housing and local capacity. The government is also continuing housing deal negotiations with Greater Manchester, the West Midlands, Leeds and the West of England. 

 

The Budget also contained a number of announcements that will be of particular interest to stock retained councils and their tenants including:

 

Selected lifting of Housing Revenue Account (HRA) borrowing caps - ARCH has long called for the lifting of HRA borrowing caps and our latest report "Raising the roof" submitted to government in advance of the Budget reiterated that call. The government have responded by announcing a selected lifting of borrowing caps for councils in areas of high affordability pressure to enable councils to build more council homes. Councils will be invited to bid for increases in their caps from 2019-20, up to a total of £1 billion by the end of 2021-22. The government also promised to monitor how authorities respond to this opportunity, and consider whether any further action is needed.

 

Estate regeneration - The Budget provides £400 million of loan funding for estate regeneration to transform run-down neighbourhoods and provide new homes in high‑demand areas.

 

Fire safety works - The Budget re-confirms that, where measures are essential to make a building fire safe, the government will make sure that current restrictions on the use of local authority financial resources will not prevent them going ahead. However it stops short of making financial resources available to all councils, committing only to await the findings of the Hackitt Review into Building Regulations and Fire Safety and respond to the recommendations when they are published.

 

Grenfell Tower - The Budget commits £28 million additional community support to victims, including new mental health services, regeneration support for the Lancaster West estate, and a new community space.

 

Housing Association Right to Buy & the High Value Asset Levy - Although not specifically mentioned in the Chancellor's Budget speech, the Budget confirms that government will proceed with a £200 million large-scale regional pilot of the Right to Buy for housing association tenants in the Midlands. There is no specific mention of the HVA (High Value Asset) Levy but ARCH understands that the idea of funding the extension of a RTB to housing association tenants through a HVA Levy on stock retained councils has not been abandoned although there is likely to be an announcement soon that councils will not be expected to pay the HVA Levy in the next financial year 2018-19.

 

Universal Credit - the government have responded to concerns about the impact of Universal Credit and have announced in the Budget that they will provide more support to Universal Credit claimants:

 

  • From January 2018 those who need it, and who have an underlying entitlement to Universal Credit, will be able to access up to a month's worth of Universal Credit within five days via an interest-free advance. The government will extend the period of recovery of any advance from six months to twelve months. New claimants in December will be able to receive an advance of 50% of their monthly entitlement at the beginning of their claim and a second advance to take it up to 100% in the new year, before their first payment date

 

  • From February 2018 the government will remove the seven-day waiting period so that entitlement to Universal Credit starts on the first day of application. ARCH has previously called for the seven day waiting period to be removed in our report "Pause for Thought" submitted to the government in August this year. 

 

  • From April 2018 those already on Housing Benefit will continue to receive their award for the first two weeks of their Universal Credit claim

 

  • The government will also make it easier for claimants to have the housing element of their award paid directly to their landlord but have not set out any further details as yet.

 

To support these changes the government will roll out Universal Credit more gradually between February 2018 and April 2018, and roll-out to all Job Centres will be complete in December 2018.

 

Homelessness -The Budget also contained announcements on a number of measures to address homelessness and rough sleeping including the establishment of a Homelessness Reduction Taskforce and investment of £28million in three Housing First pilots in Manchester, Liverpool and the West Midlands and £20million of funding for schemes to support people at risk of homelessness to access and sustain tenancies in the private rented sector.

 

ARCH Policy Adviser Matthew Warburton has prepared an ARCH Briefing on the housing implications of the Budget for ARCH members.

 

ARCH Chief Executive John Bibby comments:

 

ARCH has long been campaigning for the government to lift HRA borrowing caps to enable councils to build new council homes and the Budget announcement that government will lift the HRA borrowing caps for councils in areas of high affordability pressure is to be welcomed and marks a significant shift in government policy towards council housing.


Nevertheless there are clearly strings attached and we would have much preferred an overall lifting of the HRA debt caps but nevertheless this announcement is extremely welcome. Our concern is that the opportunity to bid is likely to be limited to councils within as yet to be defined areas of "high affordability pressure". The government need to define what it means by this as quickly as possible and ensure that the bidding process itself is clear and simple so as not to take up unnecessary resources within local authorities in simply putting together bids that may ultimately be unsuccessful.

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