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Wales affordable housing review calls for reform and ‘grant partnerships’
A highly anticipated Welsh government-commissioned review of affordable housing supply has called for an “overdue” reform of the grant system, including the introduction of long-term partnerships funding for social landlords.
The review’s final report, published today, said the existing fixed-rate, annual grant system for affordable housing development in Wales has a “very weak” focus on value for money and that reform “is overdue”.
It called for the introduction of "grant partnerships" which would see money handed out based on promises by social landlords to deliver a target number of new affordable homes. The funding would be more flexible than current systems and would avoid a “race to the bottom” on grant levels, the review panel argued.
It also recommended that ministers introduce a five-year social housing rents policy from 2020/21 with added flexibilities and emphasis on cost efficiency. The panel said there was “little justification” for the government to set anything above Consumer Price Index plus 1%.
Inside Housing reported earlier this month that the independent panel would call for grant reforms and a longer-term rent settlement.
The review lasted a year, having been announced by then-housing and regeneration minister Rebecca Evans in April 2018 with the stated aim of finding ways to boost affordable housing delivery in Wales.
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Among the panel’s 22 key recommendations are also calls for a new arm’s-length public sector land management body and for all new affordable homes to be built to Energy Performance Certificate ‘A’ standards from 2021 – with all new homes meeting this standard by 2025.
It said the Welsh government should commission an independent financial review of councils and large-scale voluntary transfer housing associations that receive cash to help them meet the Welsh Housing Quality Standard.
Landlords should also be required to decarbonise existing homes in order to continue receiving the funding once that goal is met, the report said.
In her foreword to the review’s report, panel chair Lynn Pamment said maintaining the “status quo is simply not sustainable”.
Ms Pamment, a senior partner at PwC in Cardiff, said in a separate statement: “This review offers Wales a unique opportunity to make ground-breaking improvements to the supply and quality of affordable housing, recommending longer-term certainty for local authorities and housing associations, while balancing the continuing pressures on the public spending available to support housebuilding.
“Importantly, it also offers flexibility and a greater level of self-determination for ambitious organisations.
“I am grateful to all of the panel members and to the housing sector for their productive input into this work. I hope this report will play a significant part in efforts to increase the supply of affordable housing in Wales.”
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Julie James, housing and local government minister for the Welsh government, said: “I will consider this report carefully as we look to build on our ambitions to dramatically increase affordable housing in Wales.”
Stuart Ropke, chief executive of Community Housing Cymru, said: “Wales is facing an ageing population, a climate change emergency and a housing crisis, which means that we must do things differently.
“The panel in response have laid down some challenges on rent policy, grant and standards, among other areas, and we thank them for their work."
Matt Dicks, director of the Chartered Institute of Housing Cymru, said: “This represents, in some ways, a radical step forward.
“We would expect the Welsh government to adopt the recommendations in full but during that process we must ensure we guard against unintended consequences, particularly around the proposed grant regime – which has raised concerns about a race to the bottom, as a more variable approach to grant allocation leads housing organisations to promise ever more homes per pound of grant.”
At-a-glance: key recommendations from the Independent Review of Affordable Housing Supply in Wales
- Councils should be required to provide regular, standardised Local Housing Market Assessments
- New “consolidated and simplified” standards for grant-funded and Section 106 homes should be developed, concentrating on minimum space standards, including for inside and outside storage
- All new affordable homes should be near zero carbon/Energy Performance Certificate ‘A’ standard from 2021, with all homes achieving the same standards by 2025 irrespective of tenure
- The Welsh government should develop a strategy for further use of offsite manufacturing and modern methods of construction
- A new five-year rent policy from 2020/21, with new flexibilities and a focus on landlords considering value for money as well as affordability
- Councils should be able to access grant and be encouraged to partner with housing associations
- A new arm’s-length body to act as a hub for public sector land management
- Grants should be reformed to introduce a new “flexible, long-term, five-year affordable housing supply partnerships model”, which combines existing funding pots and tests “the contribution of private finance and alternative finance models”
- The Welsh government should commission an independent financial review of councils and large-scale voluntary transfer housing associations receiving Dowry and Major Repairs Allowance to help them meet the Welsh Housing Quality Standard (WHQS)
- Landlords “should be required to demonstrate an accelerated programme of decarbonisation of existing homes” in order to continue receiving the funding once WHQS is achieved
