Better late than never

Posted by: Jules Birch

30/06/2009

After three false starts, the government seems to have finally come up with a housing rescue package that could make a real difference.

The £1.5bn of apparently new funding for new homes and imminent introduction of self-financing for council housing announced in Building Britain’s Future by Gordon Brown yesterday may not be everything the sector was pressing for but it amounts to much more than the paltry packages of  brought-forward money announced last year.

Half of the new money seems to come from other budgets (eco towns? RDAs? decent homes?) and half from other departments like the Home Office and Transport. It’s a recognition at last that the credit crunch and recession just might mean that more needs to be spent on affordable homes. Better late than never - and it comes at a time when the pressure is on public spending of any kind. 

The Communities and Local Government (CLG) department says the £1.5bn will fund 20,000 new affordable homes and another 10,000 delivered through the private sector. The detailed breakdown is:

• extra funding for councils and housing associations to deliver 15,500 new homes (11,000 social rented, 4,000 affordable)
• extending the Kickstart programme with the aim of delivering 13,000 homes (of which 4,000 will be affordable)
• investing in the development of public sector land to delivery 1,250 homes of which 500 will be affordable. 

Previous Labour spending statements have had a habit of not turning  out to be quite impressive as they  were spun at the time. However, taking this one at face value, it will have a double benefit, delivering more desperately needed new homes in the next two years and ensuring that the housing budget enters the slash and burn spending round after the next election starting from a higher base. 

Housing minister John Healey is due to announce more details of the review of the housing revenue account later today. However, Brown’s statement made it clear that councils would be allowed to keep both capital receipts and their rents and Healey told Inside Housing last night that he would ‘dismantle’ the current system.

That still sounds some way short of what Defend Council Housing and the Local Government Association (LGA) were demanding and of Brown’s pledge in February that he would ‘sweep away anything that stands in their way’ but again it is better later than never. The devil will now be in the detail of how self- financing is equalised between different local authorities and how  the government intends to ensure that surpluses are spent on housing. 

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