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Sector figures call for LHA changes and council funding boost in Spending Review
Leading housing figures have called on the government to use tomorrow’s Spending Review to bring in wide-scale changes to help local authorities and housing associations to combat the housing crisis.
Housing association bosses and trade bodies have played down the possibility of any major housing giveaways in terms of housing supply due to the one-year review focusing on revenue rather than capital expenditure pledges.
Nevertheless, those that Inside Housing has spoken to have said that action could be taken in a number of different areas by chancellor Sajid Javid tomorrow to assist the sector, including restoring Local Housing Allowance (LHA) levels and boosting funding for depleted local authority housing teams.
In August Mr Javid revealed that he would be carrying out a fast-tracked one-year review, instead of the three or four-year Spending Review that was expected.
The review is set to take place tomorrow however, depending on events in parliament today that could see a bill to stop a no-deal Brexit passed and a general election called, it could be postponed.
Melanie Rees, head of policy and external affairs at the Chartered Institute of Housing, said if the review did take place the Treasury needed to act on LHA freezes which had a clear link to preventing homelessness.
She said: “Since it was frozen four years ago, it has got seriously out of kilter with rents at the lowest 30% of the market which it was supposed to cover. We have been asking the government restore that link.”
Ms Rees added: “In some of the worst-affected areas, you are looking at as few as five to 10% of homes [which are] affordable to people on LHA.
“What it is doing is making it harder for people to access affordable homes, and that includes people in work.”
The Local Government Association and housing charity Crisis have also added their voices to the calls for Mr Javid to boost LHA rates as part of the review tomorrow.
Brian Robson, executive director of policy and public affairs at the Northern Housing Consortium, said the biggest ask for those in the North is for the government to put in place a real-term increase in funding for local authorities for the first time in a decade.
He said: “We know local authorities have faced cuts of over 50% in the past 10 years and we think the lack of capacity in housing and planning departments in the North is constraining the drive for greater housing supply and quality.
“We want to see real-term increases for the first time in decade, we also want to see funding provided flexibly enough so that where authorities choose to it can be put towards housing and planning.”
Jon Lord, chief executive of Bolton at Homes, said the government should use the review to look at the formulas used to decide on where housing funding is channelled, so government money doesn’t always go to the areas of low affordability.
Last October the Ministry of Housing, Communities and Local Government announced a new formula to decide how funding for housing would be allocated, with more being channelled to areas of low affordability.
Last month Inside Housing revealed that this was disadvantaging Northern councils, with these authorities receiving less money for housing than those in the South.
Mr Lord said: “They should continue to put significant resources into housing but think about the fact that formulas that might suit areas of high demand don’t always suit the delivery of housing in other areas, where the challenges are greater on different issues. They should revisit this.”
He also warned that the government should avoid making any changes to the current rent formulas, as any changes would “throw the business plans of associations into disarray, just as they were coming back on track”.
Housing association bosses said that while there was a need for a “longer-term capital settlement”, they did not expect it in this review. Nevertheless, they did call for a statement of intent from the government that housing was high up on its priority list.
Paul Hackett, chief executive of Optivo, said: “It would be a fantastic opportunity to show that they recognise that housing can play a major role in boosting the economy.
“Really, now is the time to look at fiscal expansion as a means to boost the economy.”
Helen Evans, chief executive at Network Homes and chair of the G15, said: “I’m hoping that the message about housing may get slightly more priority than it’s got in recent statements. But this is a day-to-day Spending Review, isn’t it? It’s not the big capital Spending Review.
“We have moderate expectations but we hope there is some sign that the government recognises the role that housing can play and should play in the bigger review to come next year.”
