Why a shake-up of Wales’ grant system must lead to more affordable homes

The growth of the sector, and our shared ambition with the Welsh government to tackle the housing crisis, has meant not only an increase in the number of homes that housing associations are delivering. In recent years, Wales’ administration has also invested an increasing amount of grant funding in the sector.

As the review’s work progressed, the distribution and allocation of that grant funding was one of the areas of greatest debate.

How we use public money, who receives it and the way in which it is allocated will always be an emotive debate.

At its heart are questions of accountability, value for money and how that money best serves the communities of Wales. And the panel was certainly given plenty of food for thought in this area over the course of the review.

Housing associations were clear that to achieve our ambition of building 75,000 affordable homes by 2036, grant money must be delivered in a different way.

The recommendation to step away from annualised budgeting towards longer-term programmes, based on a regional footprint, would offer housing associations greater certainty to plan developments.

It would also allow them to think strategically about the relationships needed to deliver on their ambitions.

And while the stability of a fixed grant rate has been Wales’ only constant in an ever-turning world, housing associations knew it was unsuitable for the variety of developments the sector now delivers.

Complicated regeneration projects, areas with high land values and those with challenging economic circumstances require a system that can flex to the nuanced needs of different localities, standards and rent levels.

“The flexibility proposed by the report should not become a by-word for driving down costs to the lowest common denominator”

Housing associations will not shy away from the debate that is posed by the report as to how we offer the best value for money to our tenants and the communities we serve.

However, the flexibility proposed by the report should not become a byword for driving down costs to the lowest common denominator.

As independent social organisations, making sure our tenants receive value from every penny we spend must be at the heart of our work all the way through from board decision-making to processes and procedures.

We strongly believe that a series of banded grant rates which recognise the challenge of various types and sizes of development would allow housing associations and councils to access a flexible grant system in a more meaningful way.

However, perhaps the panel’s most important recommendation on grant is that on the need for further resources.

The panel is right that if we want to solve the housing crisis in Wales, we need to be prepared to increase the amount of capital investment in the system.

A long-term and adequately resourced grant programme which creates opportunities to collaborate and use the full expertise and capacity of housing associations across Wales is an important element.

“If we want to solve the housing crisis in Wales, we need to be prepared to increase the amount of capital investment in the system”

Whatever the technical arrangements for the grant to be distributed, it is vital they support the building of genuinely affordable, well-designed, energy efficient homes that provide the taxpayer value for money. The plans, however, should not prioritise cost over these vitally important factors.

We will be working closely with the Welsh government as they respond to the review’s recommendations in the coming months.

Our response to this work will be shaped by three questions: will the new system deliver more homes? Will those homes be genuinely affordable? Will those homes be fit for the future?

Any new system of distributing grant must have those objectives at its heart, but it must also have the resources to deliver on all of our ambitions.

Aaron Hill, public affairs manager, Community Housing Cymru