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In the levelling-up debate, we must not forget London
On the eve of the Budget, Olivia Harris warns that parts of the capital must not be left behind in the bid to rebalance the UK’s economy, while the government must also help the sector tackle climate change
Although in many respects we have just about reached the third full month of this new government, the general election feels like it took place a lifetime ago.
Whilst the UK did leave the European Union on 31 January, as promised by the prime minister, the recent flooding and the coronavirus outbreak make even that seem like a distant memory.
Nevertheless – and despite an unexpected change in chancellor as well – the government will deliver its first Budget of the new parliament tomorrow.
There has been much speculation that this will set the scene for the next five years and detail how Boris Johnson’s government will seek to ‘level up’ those parts of the UK it perceives as facing economic, social and environmental disadvantage.
At the time of the general election, I believe we all took this to mean, in effect, everything in the UK that wasn’t southern England.
Nowhere was this levelling up to be felt more acutely than in the realm of big infrastructure, the delivery of which could unlock sustainable economic growth in areas of the country that felt they had been “left behind” over the past 30 to 40 years.
This included a firm commitment to increase the rate of housing delivery as a result of this infrastructure provision, such as housing growth in relation to HS2, but also to meet a manifesto pledge to increase opportunities for homeownership.
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However, in all of this, there has been very limited reference to both infrastructure provision and housing delivery in London, where the capacity to add remains very strong – provided the right mix of financial and political conditions are met.
The hard fact remains that in many respects, huge swathes of London also need “levelling up”, not only to continue to drive economic growth in the capital, which supports the rest of the UK, but to tackle the significant areas of social deprivation and subsequent lost potential that remain stubbornly entrenched.
Central to achieving this is the continued provision of new housing in London – especially affordable housing across all tenures, given the huge market distortion and subsequent affordability crisis the capital has experienced since at least the early 2000s.
“Before we start talking about numbers, we need to consider what types of new homes we really need and what consumers (be they renters or homeowners) actually want”
However, as I referenced in a previous article, before we start talking about numbers, we need to consider what types of new homes we really need and what consumers (be they renters or homeowners) actually want.
It remains a glaring omission that very little thought seems to have been given to the views and needs of renters who cannot afford market rent or do not want to enter homeownership through either market or shared ownership products.
An important component in continuing to be able to deliver the affordable homes we need – especially the provision of new rental homes at a price point above social rents yet significantly below open market rent – is a firm, ongoing commitment by the government that it will provide not only London’s mayor and its boroughs with the power and resources to deliver, but also a hard financial commitment to London to co-fund infrastructure provision to unlock housing growth.
This should be in addition to significantly improving the viability of new affordable homes through a package of partial funding.
This is an issue we see as crucial if we are to truly level up every part of the UK and one the government should certainly be looking to address in the Budget.
It hardly seems equitable that some parts will be levelled up, while others in arguably greater need are in effect “levelled down” through no fault of their own, based on an assumption that London is a wealthy and successful city with limited need for greater intervention.
Yet it is not only the challenge of seeking to tackle economic and social inequality in which the sector needs to be supported to take a leading role.
“Whilst it is right that the sector fully embraces the need for action, the government does need to be realistic in how that will affect delivering affordable homes, especially in high-value areas, and respond accordingly”
It is also about working in partnership to help play a vital role in addressing one of the greatest challenges facing humanity – climate change.
Yet, we must be realistic that in the short-term, trying to achieve net zero carbon emissions will have a real impact on delivery costs and subsequent viability, which may result in even fewer affordable homes being provided when using the cross-subsidy model.
So, whilst it is right that the sector fully embraces the need for action, the government does need to be realistic in how that will affect delivering affordable homes, especially in high-value areas, and respond accordingly.
We firmly believe the chancellor needs to consider both these key points and produce a financial and policy response that not only helps us to play a crucial role in delivering net zero in new developments, but also remembers that London is a core part of the UK – one that remains in urgent of need of also being levelled up.
Olivia Harris, chief executive, Dolphin Living
