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Javid announces 2.7% increase to MHCLG budget
Chancellor Sajid Javid has announced a 2.7% increase in the Ministry of Housing, Communities and Local Government’s (MHCLG) budget.
In his Spending Round, delivered today in the House of Commons, Mr Javid said that every department would see its budget rise at least in line with inflation.
He added: “That’s what I mean by the end of austerity.”
MHCLG’s programme and administration budget, which limits the amount that the department can spend day-to-day, will rise from £1.57bn to £1.64bn for 2020/21.
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Meanwhile, its capital budget, which is spent on investments that add to the public sector’s assets, will increase from £10.7bn to £10.8bn.
The Spending Round, unusually for a review of departmental budgets, covered only one year, delaying the multi-year Spending Review in order to help departments prepare for Brexit.
The National Housing Federation warned last month that this decision will “almost inevitably” impact housing supply as housing associations hold back on buying land.
Of the new funds going to MHCLG, £54m will be spent on reducing homelessness, Mr Javid said. This will lift the total amount to be spent on homelessness in the year to £422m.
According to documents submitted with the Spending Round, the increase will also include £24m of additional funding for the Building Safety Programme, which is focused on removing dangerous cladding from high-rise buildings.
A spokesperson for the Treasury told Inside Housing that this funding would not be spent on remediation, saying it was “resource funding for the Building Safety Programme, to support the government’s response to the Hackitt review”.
The documents also suggested that the government would “continue support to increase homeownership through the Help to Buy equity loan”.
They went on to say that Homes England, the government’s housing delivery agency, will receive “additional funding to deliver more homes where people need them”. When asked by Inside Housing, a Treasury spokesperson declined to confirm the amount that will be provided but did indicate that it would pay for the organisation to expand.
In his speech, Mr Javid called for “an infrastructure revolution”. As examples of this, he mentioned rail, roads, broadband, mobile networks, schools and energy but did not include housing.
Responding to the Spending Round, shadow chancellor John McDonnell said it was a “sham”, accusing the Conservatives of missing an opportunity to end austerity.
He added: “The Tories have checked what are the top three or four issues in the polls and they’ve cynically judged how little money they have to throw around to try and neutralise those issues and the concerns of people.”
Update: at 15.39 on 4.9.19 This story was updated to include a response from a Treasury spokesperson to two questions from Inside Housing.
