Budget 2020 | Industry opinion

Budget 2020 | Industry opinion

From a £1bn building safety fund to remove unsafe cladding from high-rise residential buildings, to a £12bn multi-year extension to the Affordable Housing Programme, Chancellor Rishi Sunak’s Budget included a number of important measures for the housing sector, especially social housing. LABM garners opinion from across the sector.

Nicholas Harris, Chief Executive of Stonewater, said: “Tackling coronavirus is rightly a national priority and this is reflected in the Budget statement. At Stonewater, the wellbeing and safety of all customers, colleagues and contractors is our first priority. We are monitoring the situation with Coronavirus extremely closely and following all advice issued by the authorities.

“But our essential work as housing providers must continue. Boilers still need to be serviced, homes still need to be built, support services still need to be provided. To ensure we continue delivering for our customers, we have identified four key areas and agreed our attitude to risk in each area: Customers, Colleagues, Contractors and Finance.”

“On 2nd March, our board signed-off our Coronavirus policy, based on these four areas. Our teams are fully aware of the specific steps they need to take to keep themselves and customers safe, minimising the chances of spreading Coronavirus. We are continuing to do the best job we can under difficult and challenging circumstances.”

Jonathan Carr-West, Chief Executive of LGiU, added: “This Budget was dominated by the Government’s response to Coronavirus. No one could argue with that, but for local government it provides more questions than answers.

“Social care has been all but absent in the response to Covid-19. Hospitals will not be able to cope if large numbers of older sufferers cannot be discharged because of a lack of social care provision and social care providers will not be able to cope if a fifth of their already stretched workforce is off sick. This could create a dangerous and vicious circle.

“The £500m hardship fund the Chancellor announced for local government will help with this, but will it be enough? Mr Sunak promised “whatever it takes” for the NHS, but once again, we risk forgetting the symbiotic relationship between health and social care.

“Councils will be at the front line of our response to Coronavirus and will be a crucial player in long term economic transformation. However, local government may feel that it has dropped through the middle somewhat as the Government attempts to get so many other things done.”

Mark Perry, Chief Executive at VIVID commented: “Coronavirus was understandably a key focus in the budget. It was encouraging to hear the Government is taking action to support the wellbeing of the most vulnerable in society. Including temporarily removing the minimum income level for universal credit and providing a £500m hardship fund for local authorities to support people in their communities.

“Having a safe and secure place to call home is a basic human need, vital to everyone’s health and wellbeing. We look forward to continuing working closely with government to address housing issues including building the new homes and supporting the wellbeing of our customers.”

Social housing and affordable homes
Government’s recognition of the need for greater investment to tackle the housing crisis was reflected in the Budget, a point welcomed the housing sector. CIH Chief Executive Gavin Smart said: “We are pleased that the Chancellor agrees with us that to deal with the crisis housing needs long-term attention and investment from government. A £12.2bn multi-year extension to the affordable homes programme will give some certainty — we hope this will include significant funding for homes at social rents, so that we build the truly affordable homes we so badly need.

“With a comprehensive spending review still to come, we will continue to urge government to invest in the social rented homes we need so badly and to ensure that people on low incomes have the help with housing costs they need.”

Kate Henderson, Chief Executive at the National Housing Federation, concurred: “It delivers more certainty and new investment into housing for people most in need. These are all things housing associations have been calling for.

“We welcome the Government’s commitment to a £12bn five-year Affordable Housing Programme, the main funding pot for affordable housing. It will help housing associations build much-needed homes across the country. We look forward to working with government to shape the details, ensuring this money delivers homes for everyone.”

Cllr David Renard, the Local Government Association’s Housing Spokesman, said the LGA was pleased the Government had acted on the Association’s calls to cut interest rates for investment in social housing, and welcomed the extension to the AHP, however he urged that the programme be re-purposed to help those most in need: “Greater investment in the Affordable Homes Programme is a positive step, but with more than a million households on council waiting lists, and over 86,000 households in temporary accommodation, it is vital the programme is re-focussed towards building homes for social rent.”

Stonewater’s Nicholas Harris added: “This government was elected on a platform to ‘level-up and spread opportunity across the UK’. We see affordable housing as a vital part of national infrastructure and are very pleased to hear the Chancellor agrees in his Budget statement.

“The £12.2bn AHP from 2021 looks like an increase on the current £9bn programme so that is particularly welcome and something we will be keen to bid on once we see the details.

“As a developing housing association with a footprint across England, we are already playing our part in helping level-up the housing market. We are pushing ourselves to build 1,500 affordable homes every year by 2022/3 and stand ready to work with the Government do even more to tackle the housing crisis.”

Nicholas continued: “A key point will be ensuring a range of affordable housing tenures are funded to meet our customers’ needs — this includes affordable rented housing. We look forward to further detail of the increased investment in affordable housing and the upcoming publication of the 30-year National Infrastructure Strategy.”

VIVID’s Mark Perry added: “It was interesting to hear the Government’s plans for the year ahead and where housing sits on their agenda. We’re pleased the affordable homes programme will be extended so that 70,000 more homes can be built in the areas most in need. The housing crisis and its impact on people isn’t going away so this announcement is encouraging but we all need to ensure the continuing lack of housing supply and affordability is addressed across all tenures.”

Housing policy and greater collaboration
Michelle Tyler, Director, Social Housing at Civica, welcomed the additional support for housing providers, but highlighted the need to address housing policy: “As a partner to over 400 housing providers, we welcome any changes that will better support them in their aim to resolve current housing issues. This additional funding for housing should go some way to meeting the current shortage, although research from BBC Housing Briefing suggests the UK still has a housing supply gap of approximately 1.2 million homes.

“The issue is not just in the supply of houses. In research we conducted amongst social housing providers, it was revealed that the major concern was in improving housing policy. What’s needed is a clear and flexible set of policies that enable social housing providers to service an ever-expanding, aging and diverse population whilst being able to cope with the ongoing financial demands placed upon them. Exploring new ways of working by investing in skills to help providers leverage new technologies, and further collaboration between the public and private sector are critical if we are truly to deliver a housing market that works for everyone.”

Richard Hyams at astudio called for a cross-party initiative to address the housebuilding challenges and greater private/public partnerships: “The concerted effort to tackle the UK’s housing crisis is commendable, though the fact that one third of local authorities failed to meet their housebuilding targets last year is a clear demonstration that more needs to be done. If we are going to realistically address the long-term challenges posed by the crisis, we need to see not only greater budgetary support, but also a cross-party initiative, which goes above the election cycle and fosters greater partnerships with those both in the public and private sector.

“Meaningful progress towards housing affordability as well as carbon neutral goals set by the London Energy Transformation Initiative (LETI) and the Royal Institute of British Architects (RIBA), can only be made if they are supported by an advisory committee which sees beyond party administrations and plans beyond the next few years, even the next few decades, for a future where the UK is affordable, accessible and carbon neutral.”

Tackling homelessness
On the subject of homelessness, Kate Henderson from the NHF said: “It’s good to see the Government taking action on their manifesto commitment to tackle homelessness.”

CIH’s Gavin Smart added: “The commitment of £643m funding to provide 6,000 homes for rough-sleepers is a positive step. To support this commitment the gap between local housing allowance rates and the lowest 30% of private rented homes locally needs to be closed, if we are to successfully end homelessness once and for all.”

The LGA’s Cllr David Renard, also welcomed the announcement: “It is good the Government has announced further funding to get people sleeping rough off the streets and into safe and warm accommodation, including extra money to address substance misuse.

“With over two thirds of councils spending more than they planned to on tackling homelessness, it is vital the Government follows this with long-term funding for homeless prevention in the Spending Review.

“It should also restore local housing allowance rates to cover at least the lowest third of market rents and give councils the powers to invest in new homes for those that need them, by reforming Right to Buy and allowing councils to keep receipts in full and set discounts locally.”

Stonewater’s Nicholas Harris said: “The announcement of extra investment to prevent rough sleeping, takes the total to £650m, following other recent announcements. This should provide accommodation for 6,000 rough sleepers and support services for a total 11,000 each year. As a leading provider of housing support services, Stonewater wholeheartedly welcomes this investment.”

Vivid’s Mark Perry added: “The Government’s announcement for extra funding of £650m to provide new accommodation and support services for the homeless was also well received. The current housing crisis means there are many people in need of a home, so we hope this remains high on the government’s agenda.

Peter Hordley, Head of Partnerships at Novus, commented: “The Government’s announcement of £650m of funding to help the rough sleepers into permanent accommodation presents a challenge to the housing industry to actively develop solutions that will prevent and alleviate homelessness in all of its forms. Now it is up to us as contractors, designers, housing associations and communities to work together to take this opportunity and make a positive change.”

Building safety
A £1bn Building Safety fund to remove unsafe cladding from high-rise residential buildings was also announced in the Budget. The CIH’s Gavin Smart commented: “While an additional £1bn to remove all types of dangerous cladding from buildings over 18m in height is welcome and recognises the urgent need to address building safety following the Grenfell tragedy, the scale of investment required is likely to run to at least 10 times that amount. It is also important that we ensure that affected buildings below that height and leaseholders also receive the funding needed to make those homes safe.”

Lord Porter, the LGA’s Building Safety Spokesman, added: “We are pleased the Government has listened to the LGA and launched this new fund, which will help ensure thousands of building residents will no longer have to live with dangerous cladding systems.

“Innocent leaseholders and owners cannot be expected to foot the cost of replacing dangerous cladding on their buildings and we have been calling for government action on this for more than two years. More work is needed to address other aspects of building fire safety, but this is a positive step.

“The extra £20m for Fire and Rescue Services, to increase inspection and enforcement capability, is also helpful in delivering the effective fire safety regulation and properly funded training we have been calling for.”

David Westgate, Group Chief Executive at Andrews Property Group, welcomed the fund but said the key issue here is how quickly the funds can be called upon and if there will be any specific criteria that must be met for developments to be eligible: “The funds have officially been made available but the logistics have yet to emerge. In the meantime many people’s lives have been put on hold as they cannot secure mortgage finance and they cannot sell their homes.

“What’s also vital is that the new fund covers rendered insulation as well as combustible cladding. In our experience, the cladding issues we are seeing around the UK could soon be surpassed by the problem of rendered insulation.

“If we are to genuinely make every apartment and housing block in this country safe then the newly announced fund needs to cover all materials that are deemed to be unsafe, not just cladding.”

VIVID’s Mark Perry said: “Everyone has a right to be safe in their home. That’s why we’re delighted the Government has committed to provide £1bn to remove unsafe cladding on buildings over 18 metres high in addition to the funding already allocated to replace Aluminium Composite Material cladding (ACM) following the Grenfell Tower disaster. Fire safety is high on our agenda and we’re already working with specialists to ensure our homes go above and beyond fire safety standards.”

Infrastructure and greater devolution
Cllr James Jamieson, Chairman of the LGA, said: “Long-term investment in public services is desperately-needed so it is encouraging that the Budget signals a shift towards more spending on local priorities, such as building homes, boosting connectivity and filling potholes.

“Councils are best placed to ensure that infrastructure investment meets the needs of communities. With local control over how it is spent, councils can play a key role in providing genuinely affordable homes, fixing the nation’s roads, delivering high-speed broadband and high-quality mobile connectivity, boosting local economies, and tackling environmental challenges.

“There is clear and significant evidence that lives are improved, and the country gets better value for money when councils have the freedoms, funding, and maximum flexibility to make local decisions, so we are pleased to see further progress on new and improved devolution deals announced.

“This should trigger renewed momentum around the devolution process to all parts of the country so councils can do more to help the Government grow local economies and improve the lives of their communities. This will require different approaches for different areas, including how they are governed.

“Councils in England faces an overall funding gap of almost £6.5bn by 2025, just to meet inflationary and demographic pressures. We are pleased the Chancellor has signalled the start of the Spending Review process and we look forward to working with government to ensure it provides a sustainable, long-term funding settlement for councils.”

Clive Docwra, Managing Director of construction consulting and design agency McBains, said the construction industry will applaud the commitment to spend over £600bn on infrastructure over the next five years, “which includes a £10.9bn increase in housing investment and target of 300,000 new homes a year — although we wait to see the further detail of these plans.” Adding: “We would have liked to see the Chancellor go further than announcing a £400m brownfield fund to support the development of new homes: a review of the greenbelt would have been a bolder step.”

Jon Enever, Chairman at construction and infrastructure consultancy Perfect Circle welcomed the Government’s funding to improve flood defences: “The Government’s announcement of a £5.2bn fund on improving flood defences is set to benefit 360,000 homes and businesses across the UK. Flooding has already had a devastating effect on hundreds of thousands of properties across the country. By investing in our flood defences, infrastructure in areas most at risk can provide a much-needed relief to those that have been so badly affected by the flooding. The devil will, of course, be in the detail, to ensure that the investment is able to prove sufficient against changing weather conditions.”

On the subject of brownfield development Clive said: “Many brownfield sites offer potentially attractive redevelopment opportunities, so it is pleasing to see £400m being given to pro-development councils and mayors as an incentive to revitalise these derelict sites. On top of unlocking more land for much-needed housing, this decision should entice more developers to invest in working on these sites, bringing more jobs and opportunities for the local supply chain.”

Clive also highlighted the funds for the eight combined mayoral authorities, which supports the Government’s Northern Powerhouse programme: “£4.2bn from 2022-23 will be made available for eight combined mayoral authorities across the north of England. This fund will enable elected mayors to put forward ambitious infrastructure plans for their respective cities. By having more powers at their disposal, we hope to see more schemes receiving funding and going to planning stages. It is our hope to work closely with the local supply chain and authorities in these regions to deliver these vital schemes.

“This detail on infrastructure spend is welcome news for those in construction following the delay to the publication of the Government’s national infrastructure strategy, which was set out in the 2019 Conservative manifesto. This initiative should see a further £100bn of funding for improvements to both roads and local road networks, as well as the continuation of the Northern Powerhouse rail project. We look forward to the announcement of how these plans will work later in the year.”

Novus’ Peter Hordley added: “The announcement of a £400m investment in regional brownfield regeneration provides us with an opportunity to focus on a positive change in communities across the UK. Our sector is about more than just providing houses, we have a significant role in placemaking. Now, we have a bigger opportunity to work collectively as a sector to take our thinking beyond housing and shape communities that have a positive economic and social impact as well as improving on the wellbeing of those living in them.”

Zero carbon agenda
On the contribution the housing sector can make to hitting the net zero-carbon target by 2025 Stonewater’s Nicholas Harris commented: “The chancellor has rightly recognised the opportunity for the nation’s homes to lead the way in helping cut UK carbon emissions to net zero by 2050. Stonewater stands ready to support the response to the global climate emergency and work with the government to hit the 2050 target.

“We are challenging ourselves to deliver for our customers on new and existing homes. As a key part of this, we are developing a plan to make our new and existing housing stock net zero-carbon. This will be a significant undertaking, but we recognise it is the right thing to do. We are willing to make investment in our homes; however, we will need the support of the Government to provide additional funding and help to stimulate the supply chain to support things such as whole-house retrofitting.

“In decarbonising heat within our existing homes, we need to be mindful that the solutions we adopt to replace gas central heating are not counterproductive in our attempts to prevent our customers experiencing fuel poverty.”

Julie Hirigoyen, Chief Executive at UKGBC said: “Just days ago, the Chancellor billed the Budget as one which would ‘be about reaching net zero and protecting our environment’. Clearly that did not ‘get done’. While Coronavirus is rightly at the forefront of everyone’s minds right now, the transition to net zero is also incredibly urgent, with this upcoming decade crucial to achieving it. Yet government plans remain incredibly light on detail — especially with regards to buildings, energy efficiency and heat — all of which are crucial planks of a net zero economy. Instead the can has been kicked down the road again, with the promise of ‘more detail’ in the Treasury’s Net Zero Review due to be published ahead of COP26 in November.”

“Some welcome measures in the Budget include funding to improve climate resilience and biodiversity, including through a £200m place-based resilience programme, and, buried within the Budget documents, the extension of the Climate Change Agreement scheme, which incentivises energy intensive businesses to improve their energy efficiency.

“Unfortunately, notably absent from the Budget documents are the Government’s three biggest manifesto promises on energy efficiency: The social housing decarbonisation fund, Home Upgrade Grants and the Public Sector Decarbonisation scheme.”

Header image ©Jeanette Teare/AdobeStock.

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