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Homes England review recommends offloading Help to Buy and building safety
Ministers should offload responsibility for the Help to Buy scheme and building safety from Homes England so the agency can concentrate on regeneration powers and its “core mission” of housing delivery, a government review has found.
The recommendation was made in a report led by Tony Poulter, a former PwC executive, who was tasked last year with investigating if Homes England is spending taxpayers’ money efficiently and whether its role should change. All public bodies such as Homes England are subjected to a standard review process led by the Cabinet Office every few years.
Mr Poulter’s report concluded that Homes England was “the right vehicle for delivering housing, regeneration and placemaking” across the country.
His comments were welcomed by Peter Denton, chief executive of Homes England, who said that the review “acknowledges the hard work, talent and passion of our staff and partners throughout a challenging time for the market and sector”.
The review contains 10 principal recommendations, three of which are for Homes England and seven of which are for the Department for Levelling Up, Housing and Communities (DLUHC).
Homes England was urged to “define clear objectives” for each of its priority places and agree them with government. In the past few years, the agency has been active in Bristol, Sheffield and Birmingham, while DLUHC has recently announced a focus on expanding housebuilding in Leeds and Cambridge.
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It was also told to develop its operating model to focus “as much on places as on national funding programmes”, improve its relations with key local authorities and show how it was spending money across the country.
Finally, the report said, the agency should improve its systems and governance to strengthen performance management, forecasting and impact evaluations.
Communication between Homes England and government was tested in late 2022 when the market faced an inflationary shock. The report suggested that improved communication would allow funding schemes to be adjusted more quickly amid future market challenges.
However, the bulk of the report’s recommendations highlighted policy decisions to be taken by ministers, given that Homes England is increasingly being handed more responsibility by government.
In response to the recommendations Peter Freeman, chair of Homes England, said that “much of this work is already happening” but added that other improvements will require changes in partnership with DLUHC and the Treasury.
DLUHC was told to decide the relative priority between regeneration and placemaking and Homes England’s other funding programmes. A five-year strategic plan for Homes England, launched in May 2023, reinforced a renewed focus on regeneration.
DLUHC should also authorise Homes England to “take more risk to deliver more impact”, make its programmes easily accessible to small and medium-sized developers, and “be even bolder” by acting as master developer on large regeneration schemes, the report said.
In the medium term, ministers should “transfer responsibilities for the Help to Buy scheme and Building Safety Programme” out of Homes England, so that it can “concentrate fully on its core mission and new responsibilities for regeneration and places”. Currently the agency not only funds development but also manages 260,000 Help to Buy loans, the Building Safety Fund and the Cladding Safety Scheme.
DLUHC was told to change funding arrangements for Homes England to allow it to commit to “large, long-term schemes”; design more flexibility into future programmes to allow “an effective response” when market conditions change; and set budgets and efficiency targets for the agency that “take into account of the increase in its responsibilities” for regeneration and placemaking.
The relationship between DLUHC and Homes England for delivery “should be more arm’s length than it now is”, relying more on the Homes England board to govern performance and be answerable to ministers, the report added.
In a statement, DLUHC said that it welcomes the report and its recommendations and is working with Homes England on a plan for implementation.
Mr Freeman said: “I welcome such positive endorsement of the agency’s efficiency and governance alongside recommendations for both improvement and for developing our mandate and structure.”
He continued: “While there is much to celebrate, we are steadfast in our resolve to always improve, ensuring that we are effective and efficient in driving forward the country’s housing and regeneration ambitions.”
Mr Denton added: “The report makes clear we have a crucial role to play in catalysing local regeneration and housing delivery by using our land, powers, funding and expertise – reducing risk to drive investment and harnessing the potential of private and public sector skills, capital and partnerships.”
He continued: “Place-based work is central to this mission and well under way in numerous places, from Bradford, Bristol and Birmingham to Newcastle, Liverpool and Plymouth. By 2025 we expect to have entered into six strategic place partnerships with combined authorities, serving a combined population of more than 13 million people.”
Michael Gove, secretary of state for levelling up, housing and communities, said: “Today’s independent report shows Homes England is the right vehicle to deliver more affordable homes and support our plans to regenerate towns and cities across the country.
“I welcome the report and its recommendations and we will work closely with Homes England to finalise an implementation plan. This builds on our long-term plan for housing to further strengthen Homes England’s record of delivery so we can deliver more homes that are affordable, beautiful, and built in the right places.”
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