Source · Select Committees · Public Accounts Committee
Recommendation 9
9
Accepted in Part
We challenged the Department about whether housing providers build homes where they are needed most.
Recommendation
We challenged the Department about whether housing providers build homes where they are needed most. The Department does not allocate funding from the Programme based on its calculation of local housing need.20 Under strategic bidding, housing providers only state the region, not the local authority, in which they intend to build.21 The Department told us that local authorities state what mix of housing they would like when developing their local plans, and that housing providers follow these.22 The Department relies on housing providers to interact with local planning authorities and build homes where needed most, while ensuring value for money.23 We pushed the Department, noting that local authorities must meet overall targets for new homes, so are pressured to approve new homes, even if they do not meet the most pressing local need. The Department acknowledged that local authorities have to consider a trade-off between meeting local housing need, expressed by the total number of homes built, and their type.24
Government Response Summary
The government agrees to consider additional ways to work with Local Authorities to match housing delivery with local need, including exploring giving greater control over the 2021 programme to the Greater Manchester Combined Authority and the West Midlands Combined Authority, and seeking to improve benefit cost ratio assessments for successor programmes.
Government Response
Accepted in Part
HM Government
Accepted in Part
2.1 The government agrees with the Committee’s recommendation. Target implementation date: Summer 2023 2.2 The government believes that the programme already has several mechanisms in place to match delivery with local need and engage Local Authorities (LAs). Nevertheless, the government agrees to consider additional ways to work with LAs. For example, the Department for Levelling Up, Housing and Communities (the department), is currently exploring how to give greater control over the 2021 programme to the Greater Manchester Combined Authority and the West Midlands Combined Authority. 2.3 It is the responsibility of LAs to set out their plans to address local housing need, including the need for affordable housing. Social housing providers delivering new affordable housing work strategically with LAs to address specific housing problems in the areas that they operate. LAs can also direct new housing investment to places they believe it is needed through the planning system. 2.4 The government believes that affordable homes are needed across the country. Whilst there are areas with potential indicators of relatively higher need than others, such as homelessness, temporary accommodation, social housing waiting lists or local rent levels, the homes that the programme delivers in lower cost areas are still very much needed there. 2.5 There are already natural incentives on Affordable Homes Programme providers to deliver homes where they are needed. Rental tenures need to be built in areas that are best suited for their future tenants, with access to jobs, local amenities, and public transport. Homes for ownership need to be in desirable locations where they will be able to sell. 2.6 The government is proud that the 2021 programme goes further than its predecessor in targeting investment by focusing on benefit cost ratio, which boosts the value for money that the programme delivers. The government agrees that these assessments of benefit cost ratio can be applied in a more granular way. The government will seek to improve this for successor programmes.