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Committee chair warns government of ‘human cost of inaction’ as affordable housing targets slip
The chair of the Public Accounts Committee (PAC) has warned the government over the “human cost of inaction” after a damning report revealed its Affordable Homes Programme (AHP) is veering off track.
The cross-party PAC chair issued the warning after its new report found the government is likely to come up 32,000 homes short on the original targets it set out in the AHP.
The shortfall, first revealed earlier this year by the National Audit Office (NAO), could slip further because the Department for Levelling Up, Housing and Communities (DLUHC) does not have a “grasp” on the threat of soaring construction costs, the PAC report said.
The AHP is the primary channel for funds to be distributed to housing associations and local authorities to build new homes.
Since it was launched in the early 2010s, it has dished out billions of pounds to providers to build hundreds of thousands of affordable properties.
But Dame Meg Hillier MP, the PAC chair, told Inside Housing: “We’ve been looking into this for around six years and, at every stage, the government has fallen woefully short of targets for affordable housing.”
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“We hear figures and statistics a lot, but a new home is somewhere with a front door and a key, and we need to see actual delivery.”
Despite the government knowing social housing represents the best value for money, it was a ministerial decision that half of homes to be built under the 2021 AHP programme should be for ownership rather than rent, Dame Meg explained.
The report said the DLUHC has a target of just 33,550 homes for social rent under the 2021 programme, which it forecasts will be met.
The report also criticised a “lack of foresight” on environmental issues, arguing that homes currently being built might need to be retrofitted to bring them up to net zero, because the AHP 2021 programme did not set any standards.
“The department has not quantified this potential cost, and we are not convinced by its claim that introducing net-zero standards for the 2021 programme would necessarily have led to housing providers building fewer homes,” it said.
Housebuilding targets have been in the spotlight this week, after housing secretary Michael Gove caved in to backbench pressure to make the government’s target of building 300,000 homes a year “advisory”.
Despite reaffirming its commitment to the figure earlier this year, the government rowed back after a group of Conservative backbenchers ambushed its planning reforms with an amendment calling for mandatory local housing targets to be scrapped.
With the revolt growing ahead of a vote on the reforms next week, Mr Gove sent a letter to MPs informing them that the targets will be a “starting point” and become “advisory”.
Dame Meg said the row “underlines the chaos in the system”, as well as political disagreement in the Conservative Party.
“A lot of it is down to what developers want to build. There is a real concern that if the ambition is not being set nationally, it will drop off.
“Local authorities know where and what homes must be built to address the national housing crisis, but don’t have the power to act. The human cost of inaction is already affecting thousands of households and now the building programme is hitting the challenges of increased building costs.”
A DLUHC spokesperson said Mr Gove agrees with the PAC that more homes must be built for social rent.
“Increasing the number of genuinely affordable homes is central to our levelling-up mission and we’re investing £11.5bn to build more of the affordable, quality homes this country needs,” the spokesperson added.
“Before the pandemic, we had reached the highest rate of housebuilding in 30 years, and since 2010 we have built more than 630,000 affordable homes in England, including 162,000 for social rent. But there is much more to do and we look forward to working with the committee on their recommendations.”
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