Autumn Statement offers some positives, but a commitment to long-term funding for social housing lacking

Autumn Statement offers some positives, but a commitment to long-term funding for social housing lacking

Chancellor Jeremy Hunt’s Autumn Statement includes a raft of new measures, such as a commitment to unfreezing Local Housing Allowance, an investment of £110m over this year and next to deliver high quality nutrient mitigation schemes, £32m to bust the planning backlog and develop new housing quarters in Cambridge, London and Leeds, and a £450m allocation to the Local Authority Housing Fund to deliver 2,400 new homes.

But what impact will the Autumn Statement have on the cost-of-living crisis, will it help councils struggling against a backdrop of huge financial pressures, what about decarbonisation and the need for more social housing? Here, LABM shares opinion from across the sector.

Step in the right direction but we have a long way to go in empowering our regions
Responding to the Autumn Statement, Christopher Hammond, Chief Executive of UK100, the UK’s only cross-party network of ambitious local leaders committed to Net Zero and Clean Air, said: “The Autumn Statement rightly recognises our outdated energy grid has become a major barrier to — rather than catalyst for — Net Zero. We welcome interventions to speed up grid connections, support the rollout of EV infrastructure and remove constraints on heat pumps adoption. But these reforms are ultimately workarounds for a planning system that fails to put local climate action at its heart.

“Local leaders will be pleased that the beauty parade of local government funding is receding with the local funding simplification doctrine coming into force in January 2024. It is something UK100 and our members have been calling for years. This is a step in the right direction but we have a long way to go in empowering our regions from one of the most centralised states in the Western world.

“We’re pleased to see deeper devolution deals for Greater Manchester and the West Midlands, but more communities across the UK would benefit from this empowering settlement being rolled out. Manchester and the West Midlands are ambitious climate leaders, but relying on trailblazers and a patchwork devolution deals risks a postcode lottery for action on the defining issue of our times.”

Autumn Statement leaves London borough budgets ‘teetering on edge’
London Councils has warned that the Autumn Statement will leave boroughs facing massive financial pressures, with many struggling to balance their budgets this year. Although the cross-party group welcomed the Government’s decision to end the freeze on Local Housing Allowance (LHA) rates, London Councils says the capital’s homelessness crisis and wider pressures on social care will remain a “critical risk” to town hall finances across the capital.

Overall, the measures announced by the Chancellor are not expected to significantly alter London Councils’ forecast of a £600m shortfall in boroughs’ budgets this year, brought about by skyrocketing demand for services, spiralling inflation, and insufficient government funding.

Cllr Claire Holland, Acting Chair of London Councils, commented: “Boroughs will continue to face massive budget pressures. Many are struggling to balance their budgets and the Autumn Statement leaves them teetering on the edge.

“London’s homelessness emergency is a key concern. After years of campaigning for an increase in Local Housing Allowance, we welcome the decision to end the freeze. Boosting LHA is essential for helping low-income Londoners pay their rent and avoid homelessness. This is good news for London renters and for boroughs’ hard-pressed homelessness services.

“But with one in 50 Londoners currently homeless and living in temporary accommodation arranged by their local borough, the housing crisis remains a critical risk to town hall budgets. Enormous and growing pressures can also be seen across other vital services, especially adult and children’s social care.

“We will keep pushing for more funding support in the face of these on-going challenges, as well as the long-term reforms to local government finance that are crucial for sustaining London’s local services in the years to come.”

Housing decarbonisation needs more focus
Autumn StatementDerek Horrocks, Chair of the National Home Decarbonisation Group (NHDG), said: “While the Autumn Statement claimed to make the lives of people up and down the country better, the lack of any major new announcements on the decarbonisation of all housing types is disappointing.

“Decarbonising homes is about so much more than just achieving Net Zero. While that’s a clear goal, it’s also about supporting millions of people feeling the impact of the biggest crises of our time. The ongoing energy, cost of living and health crises are all worsening and the sooner we get these homes decarbonised, the better.

“A huge amount of momentum has been built in recent years — largely because of the first two waves of Social Housing Decarbonisation Fund (SHDF). We are pleased to see inclusion within the detailed policy paper of the £6bn to support energy efficiency from 2025 previously announced in the 2022 Autumn Statement, however, we would have liked the government to go much further by bringing forward Wave 3 of this scheme.

“Policy consistency is of vital importance to sustainable growth of the supply chain. It’s crucial that current momentum is built on, not stalled — and naturally filters across all housing types, not just social homes. That momentum cannot go to waste — nor can the investment from contractors and housing providers when it comes to time, resource and money funnelled into skills and innovation. There is a need for renewed confidence throughout the supply chain and wider market. And, with this round of funding not yet being allocated, this confidence is needed now more than ever to ensure that all-important decarbonisation at scale does not slow down.

“There was huge opportunity here to place focus on housing decarbonisation and its benefits, including announcing Wave 3 funding as our members’ letter to the Prime Minister advised several weeks ago. Especially with the opportunity to place more focus hot on the heels of the £80m SHDF Wave 2.2 application window opening this week. Although we recognise that substantial funding remains included within future spending projections, it is disappointing to see an opportunity to bring forward funding and improve lives, society and the economy missed.

“Together, our members will continue to champion the vital work happening up and down the country — and maintain our close relationship with the government to achieve collective goals that benefit us all.”

Mayor Andy Burnham welcomes the positives for Greater Manchester, but fears the Autumn Statement will not ease the cost-of-living pressures on residents with the lowest incomes
The Mayor of Greater Manchester, Andy Burnham, share commented: “The Chancellor’s Autumn Statement contained some good news for Greater Manchester, and we welcome that as far as it goes, but there are also gaps which give us cause for concern going into a difficult winter.

“One of our biggest calls has been the urgent need to unfreeze Local Housing Allowance and I am pleased that the Chancellor has listened. However, his uplift won’t come into effect until April 2024 which means we are still facing a difficult winter with a rising rough sleeping and homelessness crisis. There is a clear case for more homelessness funding now for our 10 councils, given the extra costs they will face this winter from both this ongoing freeze and from Home Office evictions. It is essential if the Government is to have any hope of achieving its manifesto commitment of ending rough sleeping in this Parliament. We are also concerned about plans to reintroduce the freeze in 2025 and would ask the Government to reconsider this.

“We very much welcome the confirmation from the Chancellor that Greater Manchester will get an Investment Zone backed by £160m of Government funding, boosting the growth of our thriving advanced manufacturing and materials sector. It will help us bring forward our plans for Atom Valley and deliver industries of the future and jobs to match in the north-east of Greater Manchester.

“This Autumn Statement also brings a significant deepening of devolution in Greater Manchester with the publication of a Memorandum of Understanding with the Treasury on how our new Single Settlement will work. This moves our city-region towards a Welsh-style or Scottish-style funding arrangement with Whitehall and is a big vote of confidence in Greater Manchester. It will give us much greater control of our budget at the next Spending Review and help us get better outcomes for our residents and businesses.

“While there are some good things in the Autumn Statement, I fear it will not ease the cost-of-living pressures this winter on our residents with the lowest incomes. Benefit uplifts will not come into force until April 2024 and the cut in National Insurance won’t benefit those on the lowest pay rates. Residents in all 10 of Greater Manchester’s boroughs will face a tough time over the next few months and our councils will continue to face unprecedented pressures on their budgets. Overall, it feels like a missed opportunity to do the right thing.”

Disappointing to see such little immediate financial help from HM Treasury especially in relation to energy bills
Autumn StatementPhil Andrew, Group Chief Executive of Orbit said: “We welcome the Chancellor’s announcement to increase the Local Housing Allowance to 30%. This is a much-needed increase and has been a long time coming. The 6.7% increase in Universal Credit and benefits is welcome, as is the 8.5% increase in pensions at a time when the cost-of-living crisis continues to significantly impact our customers and residents. However, these measures won’t kick in until April 2024; it’s really disappointing to see such little immediate financial help from HM Treasury especially in relation to energy bills. Our research with Orbit customers showed that 72% said that they had turned their heating off completely to save money during the winter months. People need help and they need it now.”

Government doesn’t go far enough to unlock housebuilding
Helen Moore, Group Director of Orbit Homes added: “The Government has not gone far enough to unlock homebuilding in this country, despite the housing crisis. The funding on nutrient neutrality mitigation measures tackles only a third of the homes stuck due to this issue and will inevitably take time to be implemented. The party conference commitments to reform planning and invest in planning teams disappointingly only apply to infrastructure projects not new homes. This leaves us with a planning system that remains slow and under resourced, with obstacles such as nutrient neutrality still holding up the delivery of the new homes our country so desperately needs.”

Cost of living and tax cuts
Nicholas Harris, Chief Executive of Stonewater, commented: “While the Chancellor sees some hope for the future of the economy in the form of an unexpected increase in tax receipts and the recent reductions in inflation the tax cuts announced today provide little, if any, relief to our customers, whose income is already stretched more than many can manage.

“Despite the recent fall in the rate of inflation, the effective inflation rate for the poorest tenth of households is around 2% higher than it is for the richest tenth of households. Meaning, once again, that those that can least afford it are most affected by the impact of the cost-of-living crisis because the price of essentials went up at a higher rate, and low-income families typically spend a greater proportion of their income on these items.

“We welcome the announcement that benefits will be increased in line with October’s inflation rate, at 6.7%, and the increase in the national minimum wage, which also broadens to 21 and 22-year-olds.

“We need to ensure that customers, of all income levels, but particularly those that are low paid, are aware of the support available to them, including social tariffs for utilities and home-working options.”

Social Housing Decarbonisation Fund
Nicholas added: “Stonewater continues to be committed to integrating renewable technology into our new and existing homes to support the reduction of carbon emissions as well as cutting our customers’ energy bills.

“With only around 56% of social housing currently meeting EPC band C, and a reported £2.6bn gap in the Government’s committed investment into energy efficiency, we need a guaranteed long-term solution so we can ensure our customers have warm, efficient, safe homes.

“We know that the Social Housing Decarbonisation Fund has already provided much needed funding for a range of projects across the country, but we believe that the announcement of Wave 3 should be accelerated, and all remaining funds should be released so that momentum is not lost.

“However, while our own initiatives, such as the launch of the Greenoak Centre of Excellence for zero carbon homes later in November, will provide valued insight and progression for the path towards net zero, this must not be done in silo.

“We need government backing — both through support of innovation and provision of funding, on a national scale — in order to meet the demand and achieve our goals across the social housing sector.”

Lack of commitment to long-term funding for social housing and support services
Christopher Philippou, Chief Operating Officer at specialist accommodation services provider, Stef & Philips, said: “Whilst the statement did offer some points of comfort, there remains a long way to go before we are able to make the progress needed on social housing.

“A lack of commitment to long-term funding for social housing and support services continues a recent history of short-term, unsustainable programmes that fail to address the rising number of people without a safe or secure place to live.

“The announced increase to the Local Housing Allowance rate is welcomed, though further incentives for private landlords to remain in the social housing sector are vital. It therefore would have been good to see a review of the Stamp Duty Land Tax and Mortgage Interest Relief to halt the number of landlords leaving the market. Ultimately, without them, it is impossible to currently provide the quantity and quality of social housing that we need across the country.

“As an organisation that works with local councils to deliver social housing solutions, we are seeing them engage with us more than ever before. However, no announcement of more autonomy, flexibility, powers or funding at a local level hinders their ability to make quick and suitable decisions for the benefit of their communities, ultimately stunting and delaying valuable housing projects.”

New proposals such as investment in planning welcome, but concerns raised over unintended consequences
Paul Wakefield, Partner at law firm, Shakespeare Martineau, commented: “While many of the proposals are headline grabbing and may potentially be positively received by the development industry, there may be a number of unintended consequences seeking to deliver the proposals for the new services.

“Investment to help local planning authorities to tackle the current planning backlog is welcome, as is support to deliver additional housing in Cambridge, Leeds and London.  The provision of funding to address issues of nutrient mitigation offsetting scheme is potentially also a positive for the development industry.

“Similarly, a proposal which would enable applicants to pay for accelerated decision making for major developments in England, with refunds to be given if deadlines are not met, will presumably be well received by developers who can afford to pay for the service, but may conversely increase the pressure on local authorities, which already suffer from staffing shortages.  It will be interesting to see if demand for this service — if it comes forward as proposed — exceeds the ability of the local authorities to supply the requisite services, particularly as delayed responses from statutory consultees can be a reason for slow progress, and which won’t necessarily be funded through this proposal.

“The Government has also proposed a further reform to permitted development rights to allow for the conversion of single dwellings into two flats, where there is no impact on the external appearance of the building.  However, if this were to be widely utilised, it would mean a potential increase on local services, without any financial mitigation, with local authorities presumably required to fund the increased impacts on local services which would ordinarily be offset through the use of section 106 agreements or Community Infrastructure Levy.

“Given the likely timescale for delivery of these proposals, and the prospect that many of these consequences won’t be felt until after a general election, there may be a case of storing up problems for the next government to resolve.  As the chancellor has already signalled his intention to stand down at the general election, I suspect he may not be too worried about that, regardless of the outcome of the vote.”

Commitment to improving the planning system and financial support for green industries and renewable energy welcomed
John Ord, UK&I Energy Business Director, Stantec, commenting on the energy elements of the statement said: “Running through this year’s Autumn Statement was an ambition to meet the UK’s potential to become a green energy and advanced manufacturing superpower.  These are sectors we’ve long known can drive growth and where we are well placed to succeed — but there have traditionally been significant barriers, from access to grid capacity and challenges raising finance and investment, to fundamental questions over the Government’s commitment to transforming the UK’s energy and sustainability industries.

“The Chancellor has aimed to grow confidence by tackling these concerns — and our sector will welcome the commitment to improve the planning system, financial support for green industries and renewable energy, and generally more long-term, cross-department strategic thinking.  It will now be essential to lock in this positive progress, work as a sector with government to develop the details of the long-term strategy, and secure commitment that this will be maintained and supported by current and future administrations.”

Changes to planning application fees will only go so far to addressing the backlog
Jonathan Bower, a Partner in Womble Bond Dickinson‘s planning team based in Bristol, commented: “The announcements on the changes to the planning application fees, which will follow increased application fees coming in next month, to provide for charging the full costs of major business planning applications with full reimbursement if not delivered will only go so far to addressing the backlog.

“The challenge is many local planning authorities (LPAs) are under resourced and as we have seen from planning performance agreements, not all of them have delivered what’s required; so it remains to be seen whether the carrot and stick approach will work here.

“It will be interesting to see how government intend to legislate this change, including the detail of the applications it will relate to and whether this will be an opt in by applicants, LPAs, or both.”

Continued commitment to devolution and leveraging public investment to support capital and infrastructure
Peter Cudlip Head of UK Public & Social Sector at Mazars commented: “This budget shows a continued commitment to devolution and leveraging public investment to support capital and infrastructure. For the public and social sector, the focus on rail, roads and housing creates an opportunity to make tangible investment in supporting economic development and social value — however, these are long-term projects, where benefits won’t be seen overnight.

“The most direct investment into local government was probably two days previously when the Department for Levelling Up, Housing and Communities announced which 55 local authorities would be getting their hands of a share of £1bn funding to support the Government’s levelling up agenda.

“The OBR, who report that there is a net fiscal windfall of £27bn because departmental spending is left largely unchanged, makes valid points. So, whilst there was no direct reference to funding day-to-day costs through new grant initiatives to tackle some of the key financial challenges in, for example — out of area placement costs in children’s social care — we hope this does not instil paralysis in local authorities, delaying decision making and short-term thinking and instead focus on some of the core issues within their control, such as implementing digital transformation and new technologies, and recruiting and retaining talent in the sector.”

Autumn Statement won’t get energy bills and carbon emissions under control
Simon McWhirter, Deputy Chief Executive at UKGBC said: “The Government heard the furious backlash to its green policy rollback last month; and this was a chance to realise scale of their error by shoring up protections for struggling households and small businesses and get energy bills and carbon emissions under control.

“It’s not that the Government hasn’t been presented with the ideas to address the problem. Industry has been offering oven-ready policy proposals such as modernising Stamp Duty with a ‘rebate to renovate’ incentive for households that would accelerate home insulation, cut our reliance on polluting fossil fuels, and motivate people to switch to low carbon heating and install solar panels — all while also ‘backing British businesses’ by creating a large-scale, long-term retrofit market to support industry and deliver skilled jobs throughout the country. We hope it will be announced in the Spring Budget.”

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