Source · Select Committees · Public Accounts Committee
Recommendation 10
10
Accepted
The Department told us it tried to ‘strike a balance,’ between a centrally driven approach...
Recommendation
The Department told us it tried to ‘strike a balance,’ between a centrally driven approach to need versus a local approach. The Department explained that outside London, Homes England identifies whether proposals for new homes are acceptable value for money, guided by local land supply and policy. Housing providers must then build homes 13 Qq 63, 64 14 Written evidence submitted by G15 group, dated September 2022 15 Q 63 16 Qq 69, 72 17 C&AG’s Report, para 4.4 18 C&AG’s Report, para 21, Figure 13 19 Written evidence submitted by Shelter, dated September 2022 20 Qq 59–62 21 C&AG’s Report, para 4.3 22 Q 45 23 Q 52, 59, 60 24 Qq 45–46 10 The Affordable Homes Programme since 2015 within the timeframe of the Programme. The Department decides how much funding to allocate to London and the rest of England .25 For the 2021 Programme, the GLA will receive 35% of the Programme’s funding, down from a 50% split of funding for the 2016 programme. The National Audit Office found that the 2021 programme achieved a much higher benefit cost ratio in London compared to the rest of England.26 The Department commented that there are other policy considerations, aside from benefit cost ratios, that determine the split of funding between London and the rest of England.27 Homes for social rent
Government Response Summary
The government agrees to consider additional ways to work with LAs to take greater account in the Programme of local need for affordable homes. The Department is exploring how to give greater control over the 2021 programme to the Greater Manchester Combined Authority and the West Midlands Combined Authority.
Government Response
Accepted
HM Government
Accepted
2. PAC conclusion: Housing providers do not always build in areas of higher demand. 2. PAC recommendation: The Department should consider how it can work with local authorities to take greater account in the Programme of local need for affordable homes. 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.