Housing has a key role to play in the economic and social well-being of the country, says Pat Ritchie
In the spotlight
With the continued focus on implementing the government’s housing strategy, including in this week’s Budget, it is clear that housing’s position on the political agenda and its importance to promoting economic growth, is increasingly prominent. So should we be pleased that the sector is in the spotlight? I believe we should, yet being there, and remaining there, bring their own challenges.
We’re all familiar with the statistics - recent Communities and Local Government department figures show growth of new households running at around 250,000 per year up to 2031. And we all know that £1 spent on construction generates £2.60 in gross output across the economy. But how do we make this development a reality and those statistics tangible to ministers and the local communities in which we work? How do we demonstrate that we have the appetite and capacity to deliver existing commitments, while thinking radically about the future?
Appetite for construction
I see for myself, all the time, that this appetite exists. Housing associations in particular deserve credit for the way in which they have stepped up to the challenge of delivering the new affordable rent, while a threefold oversubscription of the £420 million Get Britain Building programme clearly shows that house builders are ready to develop if the investment conditions are right.
But there are still plenty of challenges ahead. The availability of mortgage and development finance, and planning reform, are all issues that the government is quite rightly looking to address. But for me the sector’s priority must be to deliver the housing strategy.
Getting in bids for the Get Britain Building programme has been the major focus for the Homes and Communities Agency, and we have quickly been able to announce the first commissioned sites to be taken forward with a shortlist of sites under the main competition made this month. And land is a recurring theme, for custom build, land auctions, and for the private rented sector; all of which accounts for the HCA’s support for Inside Housing’s Get on Our Land campaign.
Staying with the land theme, we must continue to align our holdings with investment, to increase the amount of land available for development and speed up the rate at which it is brought forward. I would encourage our public sector partners to do the same. Land has social value as well as an economic one. To take full advantage of this the public sector must maximise the use of the regional growth fund and other investment streams, including the private sector.
This approach works. Since taking on the former regional development agency assets, I’ve seen more and more examples of where land can be used to support local enterprise - including high-profile sites of national importance such as the planned new Jaguar Land Rover plant in Wolverhampton - with gains for the community and for housing.
So, delivery is paramount - and we must achieve successful implementation in a world of reduced resources. But as a sector we also need to look to the future.
I believe we must embrace and support the work of local enterprise partnerships and the eight core cities. There is no better way to demonstrate the central role housing plays in economic growth than through meeting their aspirations for their local areas.
The case for housing is an important one - lack of supply can act as a barrier to achieving local growth, while the physical environment must be made attractive to business. We have a strong argument. The key will be to make sure our voice is heard among those who have perhaps equally compelling arguments, while linking up ever more closely with development in other sectors - such as new transport investment to help local areas bring together infrastructure and housing to support growth.
That housing is critical to social mobility, health and well-being - a foundation stone of prosperous communities - is well recognised. But the urgent need for growth and the demand for more and better quality homes will require local authorities’ skills, more than ever, as community brokers to produce developments that are the right fit for local areas.
There is also a role for local authorities in regulation, which the HCA will take on from 1 April, with a focus on the governance, viability and value for money of providers as the basis for robust economic regulation. While we will still set service levels for tenants, tenant issues will be resolved locally, often by elected members.
So as part of these initiatives, we must support local authorities in their delivery of housing, and their crucial community leadership role, for in these twin areas they are central to the success of the housing strategy.
The government’s housing reforms provide councils with an opportunity to think innovatively, with housing revenue account reform heralding self-financing and with it, for example, an opportunity for councils with their own stock to invest in housing while meeting the needs of local people.
In the slightly longer-term, we need to be radical in our thinking about the future of investment in the sector. There is likely to be further change - as the Treasury continues to make clear, restrictions on public funding are set to continue into the next spending review period and potentially beyond - so we must work together to generate new ideas.
Ensuring a stable market, building affordable housing, particularly post-2015 and supporting local economic growth with less reliance on public funding are all complementary priorities.
Pat Ritchie is chief executive of the Homes and Communities Agency