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DLUHC defends missed affordable target after London mayor calls for underspend to be reallocated
The government has defended its delivery and funding targets for affordable homes after the London mayor called for its reported underspend to be reallocated to the capital.
Sadiq Khan has called on the Department for Levelling Up, Housing and Communities (DLUHC) to reallocate any unspent affordable housing funding to City Hall if it is unable to meet its national targets.
It was reported in July that the housing department had reported a £1.9bn underspend, which included money for building safety and programmed spending on the Affordable Homes Programme (AHP) for 2022-23.
The DLUHC maintains that the surrendering of cash in this way and reprofiling it are a normal part of government finance and that it was incorrect to suggest it couldn’t be spent.
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This is because it provides departments with flexibility to manage their pressures between years and the government with the ability to target funding in areas that need it.
But a subsequent analysis by the Chartered Institute of Housing estimated that 5,000 new affordable homes could have been funded from part of the multibillion-pound figure.
A National Audit Office report from September last year found that the AHP will achieve 241,000 starts, compared with a published target to deliver 250,000 starts by March 2023.
The London component of this was exceeded in March 2023, with 116,782 homes delivered.
The remainder was not met by Homes England, which fell short of its target, with only 126,800 starts by the end of March 2023.
This means the government started only 243,582 homes by March 2023, around 6,500 short of their initial 250,000 target.
In July this year, the government’s housing agency blamed the Mini Budget last year, claiming it had “evaporated” its contingencies. Its latest annual accounts revealed it failed to hit any of its housing delivery targets for the second year in a row.
The government has since told Inside Housing it has granted an additional 5,000 homes an extension to start before March 2024.
However, even with this extension, the government will still be around 1,000 homes short of its 250,000-home target.
Mr Khan said: “In London, with the political will and a laser focus, we’ve hit the target the government set us for starting new affordable homes.
“The government’s failure to hit their own target nationally shows they are completely asleep at the wheel. Instead of launching baseless partisan attacks on London, ministers should focus on doing their actual jobs.
“If they can’t deliver their share of affordable homes nationally, then they should reallocate unspent affordable housing funding to City Hall, where we have a track record of delivery – despite the many challenges facing the housing sector – as we work to build a better London for everyone.”
In response, a DLUHC spokesperson said: “These claims are simply untrue. We are investing £11.5bn in the Affordable Homes Programme and are on track to meet our targets.
“Last year saw the highest year on record for affordable housing delivery, with a 17% increase in starts to the previous year. This builds on our success of delivering almost 660,000 new affordable homes since 2010 and our long-term plan for housing sets out how we will continue to build more homes.”
The government believes it has an ambitious long-term plan for housing, demonstrated by the recent proposal for Docklands 2.0, a vision for tens of thousands of homes in east London.
It has also launched a review into housebuilding in London. The secretary of state will work with the Greater London Authority to look at opportunities to accelerate residential development on inner-city brownfield industrial sites.
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