Source · Select Committees · Public Accounts Committee
Recommendation 43
43
Accepted
Social housing providers diverting funds for cladding remediation impacts new home construction significantly.
Conclusion
The Government has pledged to build 1.5 million homes during this Parliament and expects social housing to be at the heart of the UKs’ housing supply. Against a backdrop of the construction sector reporting workforce shortages (paragraph 20), we asked the NHF how the government’s approach to remediation in the social housing sector was likely to impact the number of social sector homes being developed.74 In both written and oral evidence, the NHF told us that to pay for cladding remediation, housing associations were having to divert funding from building new homes. The NHF told us that the impact in London had been “catastrophic” where, it said, despite facing the greatest housing pressures across the country, affordable housing starts had fallen by 90% last year. It also told us that there were adverse effects on the government’s ability to meet its target for 1.5 million new homes, but also on the cost of temporary accommodation and on homelessness. It told us that if the £3.8 billion that social housing providers were expected to spend on remediating existing buildings were instead to be invested in developing new homes, it could result in an additional 76,000 new homes being built.75
Government Response Summary
The government committed to publishing an impact assessment alongside draft levy regulations later this year and providing an update to the Committee before the end of 2025 on the interaction between remediation policies and housebuilding ambitions.
Government Response
Accepted
HM Government
Accepted
7.1 The government agrees with the Committee’s recommendation. Target implementation date: December 2025 7.2 The government will write to the Committee before the end of 2025 to provide an update on the interaction between remediation policies and housebuilding ambitions. Specifically on the Building Safety Levy, the government will publish an impact assessment alongside the draft levy regulations that will be put before Parliament later this year. The levy has been designed to minimise any detrimental impact on housing supply, whilst balancing the need to raise the revenue required to remediate buildings. It will come into effect in Autumn 2026.