Earlier today Chancellor Philip Hammond announced government’s Autumn Statement, which includes a new £2.3bn infrastructure fund to unlock land for 100,000 new homes in high demand areas, the relaxation of grant restrictions to allow for the delivery of a wider range of housing types, a continued commitment to English devolution deals and an extra £1.4bn, provided by the National Productivity Fund (NPIF), to deliver 40,000 additional affordable housing starts by 2020-21.
Here’s a round up of the latest reactions to the Autumn Statement announcement:
Affordable housing boost good news but government must take action to properly fund social care
Lord Porter, chairman of the Local Government Association, said: “Councils, the NHS, charities and care providers have been clear about the desperate need for the Chancellor to take action to tackle the funding crisis in social care. It is unacceptable that this has not been addressed in the Autumn Statement.
“The Government must take urgent action to properly fund social care if councils are to stand any chance of protecting the services which care for the elderly and vulnerable. Extra council tax-raising powers will not bring in enough money to alleviate the pressure on social care and councils will not receive the vast majority of new funding in the Better Care Fund until the end of the decade. Services supporting our elderly and vulnerable are at breaking point now.
“It is good news for local government that the Autumn Statement has accepted our call for measures to boost affordable housebuilding, which must be supported by adequate infrastructure, and which help councils tackle some of the nation’s roads repair backlog and improve broadband.
“The next few years will be extremely challenging for councils who we estimate face an overall £5.8bn funding gap by 2020. Even if councils stopped filling in potholes, maintaining parks and open spaces, closed all children’s centres, libraries, museums, leisure centres, turned off every street light and shut all discretionary bus routes they will not have saved enough money to plug this gap by the end of the decade.
“Many councils are faced with difficult decisions about which services are scaled back or stopped altogether. The Government must allow local government to use the extra business rates income it will keep by 2020 to plug this growing funding gap.
“The ability to fix longer-term funding settlements has been important for councils and something we have long called for. Given the majority of councils have taken up the option, the Government now needs to publish the Local Government Finance Settlement as soon as possible. This will give councils more time to plan for the difficult funding decisions which lie ahead.”
Following calls from the National Housing Federation, the Chancellor has today announced a number of new measures which will have a significant impact on the housing sector and the delivery of new affordable housing across the country.
David Orr, chief executive at the National Housing Federation, said: “The Government is absolutely right to see housing infrastructure as critical to improving the nation’s productivity. Housing associations are ready to step up and deliver the homes people in this country need.
“We have been calling on the Government to relax restrictions on existing affordable housing funding, so we are delighted with this announcement. Increased flexibility and extra investment will give housing associations the freedom and confidence to build even more affordable homes, including for rent, more quickly across the country. This extra investment in affordable housing demonstrates the strong relationship that housing associations have with the new Government.
“The decision to change the tapers in Universal Credit is welcome and a positive move for households which are just about managing. However, we will be raising our concerns with Government about the changes to the LHA cap for those receiving Universal Credit from 2019.
“We look forward to working with Government and our members to develop a regional Voluntary Right to Buy pilot that works for housing associations and their tenants.”
The Scottish Federation of Housing Associations (SFHA) comments on the UK Government’s Autumn Statement
Chancellor Philip Hammond today announced today as part of the Autumn Statement, that there would be a reduction in the Universal Credit taper rate from 65% to 63%. This will represent a modest increase in the benefits received by those in work.
However, it is important to note that this followed Secretary of State for Work and Pensions Damian Green’s announcement(1) on Monday 21st November that revealed ALL social housing tenants on Universal Credit will be affected by the Local Housing Allowance (LHA) cap rather than only those starting a tenancy after April 2016, as was the original proposal.
And the only exemption to the cap is likely to be short-lived. The only tenants to avoid the cap will be those who started a tenancy before April 2016 and will still be in receipt of Housing Benefit in 2019. The DWP intends to migrate all those of working age on legacy benefits, such as Housing Benefit, to Universal Credit from July 2019.
There are currently around 241,000(2) tenants in Scotland who will be caught under the new widening of the scope of the LHA cap. Ultimately, the only social housing tenants to avoid the cap will be those over working age and in mainstream housing.
Furthermore, in September it was announced that all disabled and older people in supported accommodation will also be included in the LHA cap, the impact of which was set out in a report by the Scottish Federation of Housing Associations (SFHA). However, since the report only covered possible new tenancies, the impact is likely to be over five times greater than the SFHA first estimated for supported housing alone.
Mary Taylor, chief executive of the SFHA, said: “Whilst the modest reduction in the Universal Credit taper rate is welcome to anyone claiming or receiving Universal Credit, it is important to note that the Autumn Statement came immediately after the announcement of further damaging changes. Vulnerable tenants are paying the price of the UK Government’s failure to invest in social housing particularly in England, which has contributed to the housing benefit bill growing out of control with more tenants living in more expensive private accommodation. The much-vaunted simplicity that Universal Credit was supposed to deliver now seems a distant dream. Claimants and their advisors increasingly have to navigate a maze of regulations and entitlement conditions.
“The Scottish Government will have to implement its welfare powers in the midst of this uncertainty and our members, housing associations across Scotland, face trying to protect rental income whilst securing funding to invest in the affordable home the country so desperately needs.
“As well as the concerns we have previously articulated about funding supported housing, we will be particularly anxious about the future for the 11,000 single tenants under-35 living in housing association accommodation reliant on Housing Benefit. Along with our colleagues in England and Wales facing the same challenges, we will be pressing for safeguards for vulnerable people, for example those leaving supported housing, homeless people and pregnant women.
“In terms of the announcement on funding, SFHA welcomes the announcement of £800m additional funding for the Scottish Budget, and notes that the £1.4bn investment in affordable housing south of the border should mean a further £100m for this budget through Barnett Consequentials. The Scottish Government’s commitment to increase funding in order to build 50,000 affordable homes, 35,000 for social rent, over the next five years has been greatly welcomed by the sector, and the SFHA calls for any Barnett Consequentials to be invested in affordable housing.”
(2) Drawn from: https://stat-xplore.dwp.gov.uk/
Focus on housing in Autumn Statement ‘a big step in the right direction’
Measures to support housing announced in the Autumn Statement represent a ‘big step in the right direction’, CIH has said. Terrie Alafat CBE, chief executive of the Chartered Institute of Housing, said: “Given the scale of our housing crisis the central focus on housing in the government’s Autumn Statement today is a significant step in the right direction.”
Terrie continued: “The measures announced today demonstrate this is a government which recognises housing is a key part of our infrastructure and that it brings economic benefits. It also shows this is a government which is serious about its commitment to help the many thousands of people struggling to get access to a decent, affordable home.
“The extra investment to support the building of 40,000 new affordable homes and the greater flexibility in funding for housing providers to build homes of all tenures, both of which we had asked for, are particularly welcome. It is also pleasing to see large-scale investment in infrastructure to support new house building.
“We would, however, have liked to see more to support people who need housing the most, with more funding diverted specifically to support social rents and a strategic rethink on welfare measures we believe make housing inaccessible to a significant number of individuals and families.”
Stonewater cautiously welcomes Chancellor’s affordable housing plans
Nicholas Harris, chief executive designate, Stonewater commented: “Stonewater welcomes the Chancellor’s plans to double annual capital spending on housing and free up land supply to tackle the nation’s affordable housing crisis. We’re also cautiously pleased to see a more ‘flexible’ housing programme that responds to local market needs and we look forward to more details on this.
“It’s good to see the Government putting affordable housing at the centre of this Autumn Statement. Today’s additional £1.4bn funding boost to build 40,000 more affordable homes, coupled with the relaxation of restrictions on government grant, will enable social housing providers to boost housebuilding across a wider range of housing types to meet the needs of more people rather than just new homes for first time buyers.
“It’s also encouraging to see the Government recognising the vital role housing associations play in delivering the right mix of housing which people in different financial situations can realistically afford to buy or rent, in areas where they need them most. This includes homes for low-cost rent enabling those who want to buy to save money, as well as affordable shared ownership, and good quality housing for the poorest and most vulnerable members of the communities we serve.
“Last year housing associations were responsible for almost a third of all new homes built in England, making a significant contribution to tackling the housing crisis and creating thousands of new jobs in the construction industry.”
Need to recognise the role that local authorities and city regions can play in the delivery of affordable homes
Mark Robinson, Scape Group chief executive, comments on the Chancellor’s Autumn Statement: “It’s certainly refreshing to hear the government investing in affordable housing with £1.4bn of funding for 40,000 homes, because housing associations have been under huge funding pressure for many years now, and this move is long overdue. However we also need to recognise the role that local authorities and city regions can play in the delivery of affordable homes — Metro Mayors will get more powers to borrow for infrastructure, but councils are not allowed to borrow to build homes, and so it is disappointing that this hasn’t yet been addressed by the Chancellor. We mustn’t let the government’s delayed Housing White Paper become a ‘white wash’ by once again avoiding this reform. We also need to ensure we are getting the balance right between shared ownership, affordable rent and social housing, so the new flexibility for housing providers on developments announced today is also welcome.
“The government has finally given Scotland its fair share of city deal funding with new commitments to Stirling, Edinburgh, Aberdeen and Inverness, but the Treasury mustn’t delay any further in getting investment in these Scottish cities off the ground. More powers for London and Greater Manchester are also a step in the right direction, but Merseyside, Leeds, Sheffield, and Tyneside must not be left behind.
“The Chancellor is absolutely right to prioritise the road projects that will have the biggest impact on congestion and housebuilding. LEPs in the North will get £556m for investment in projects – the lion’s share of regional investment in England — which is a big boost for the Northern Powerhouse. However we also need to ensure we are progressing the big ticket projects that will really unlock the potential of the region in the long-term, especially the Trans-Pennine Tunnel and HS3 rail link between Manchester and Leeds. The Chancellor could also have done much more to tackle the impending skills crisis, something that we can’t ignore if we are to deliver new roads, bridges and tunnels, or if we are to build the hundreds of thousands of new homes on Phillip Hammond’s shopping list.”
New housing money extremely good news
Lovell director of business development Peter Quinn said: “The £1.4bn new housing money is extremely good news for Lovell as it will allow 40,000 extra housing starts, we will work with our housing association partners and local authority partners to deliver these. It is also important that housing associations will have greater flexibility in how the grant is used. This will allow a range of housing to be provided in some areas, which will reflect local needs.
“As part of Morgan Sindall Group, we are very well placed to take advantage of the £2.3bn infrastructure funding linked to the 100,000 housing starts, with the Group able to deliver both the infrastructure and the housing.
“In London, the devolved budget will deliver an extra 90,000 homes, our partnerships in the capital are strong and we are well placed to assist in delivering these homes.
“At a time when the public finances are constrained we appreciate that housing is receiving additional funding, yet there remains a housing crisis in the country and this statement is a step towards resolving that.”
Relaxed restrictions on the funding of affordable homes will offer housing associations more freedom
Commenting on today’s Autumn Statement, Jane Forbes, PwC housing Partner said: “Housing supply remains a critical issue for the country. The Lyons Housing Commission only last week indicated that concern from the public over housing, ‘is the highest it has been for 40 years’ and there had been great expectation that today’s Autumn Statement would bring the necessary interventions from Government to address the supply shortage.
“The announcement in today’s Autumn Statement of a £2.3bn housing infrastructure fund to provide 100,000 new homes in high-demand areas and £1.4bn to construct 40,000 new affordable homes confirms the Government’s commitment to addressing the critical supply issue. The relaxed restrictions on the funding of affordable homes and the increased flexibility and investment will be particularly welcome to housing associations who will now have the freedom to build more affordable homes to meet demand.”
Autumn Statement: Government needs to move housing focus to later life buyers, says Winckworth Sherwood
Charlotte Cook, a Partner at law firm Winckworth Sherwood said: “It will be interesting to see how this money will be directed. Previous chancellors and housing stimuli have tended to focused on first time-buyers, and whilst they do need assistance the Government needs to focus more on later life buyers and occupiers.”
“By 2020 it is estimated that there will be some 20m people aged over 60. Even now, there are more over 60s in the UK and there are under 18s. The Government’s housing policy does not adequately reflect that. And whilst social housing providers and local government are responding, much greater choice of housing and tenure is needed.”
Charlotte continues: “When considering a home in later life, people look for very much the same things as when buying a first or family home — space, location, access to friends and family, concern of flats and the lack of outdoor space, transparency in relation to service charges. The one thing they do not want is the feeling or appearance of an old peoples’ home or care home.”
“There is a real lack of meaningful information to help people decide on the best route for them. The offer varies enormously from local authority to the next and from one private sector provider to another. Decisions are taken both by family members and residents, yet information provided often does not reflect that.”
Good news for construction in Autumn Statement
Glenigan, a trusted provider of UK construction project data, market analysis and company intelligence believes “the extra resources announced by the Chancellor in today’s Autumn Statement for social housing and infrastructure investment will be welcomed by the construction industry.
“The promised additional funding should help to address the need for more affordable homes and tackle the shortfalls in the UK’s transport infrastructure. It will also help to offset the impact of faltering in private sector investment on industry workloads.
“Social housing providers already have a strong development pipeline, but the realisation of planned projects has been frustrated by recent changes in Government policy. It is vital that the measures announced in today’s statement are implement as soon as possible to enable projects to be quickly brought to site.
“The provision of an additional £1.3bn of additional funds for local and national road projects should help Highways England and councils to accelerate small scale improvements to address ‘pinch points’ in the road network. These schemes can potentially help tackle congestion and improve the UK’s competitive position. Glenigan data reveals a firm pipeline of projects that have cleared the planning hurdles and could potentially be quickly brought on to site.
“The Government’s commitment to supporting a sustained increase in investment in built environment is also encouraging. The new National Productivity Investment Fund promises to add £23bn in high-value investment from 2017-18 to 2021-22, with the government target this spending at areas that are critical for productivity: housing, research and development and economic infrastructure.”
In response to housing measures announced in today’s Autumn Statement, Richard Jones, head of residential and regeneration at Arcadis, said: “Government needs to stop paying “lip service” to the housing emergency. What we need is a co-ordinated approach to the problem rather than just rolling out initiative after initiative. We need to look at what building 200,000 homes a year would look like from a need perspective and ensure that any new policy helps deliver this. It will invariably show that a large proportion of new housing will need to be intermediate or private rent, so government policy should help to support this through the prioritising of public sector land to certain tenure groups, buy-as-you-rent initiatives, planning amendments and a supportive tax regime.
“With rental products being counter-cyclical this should create an environment that encourages investment in “smart homes”, which will ease the skills shortage as well as drive efficiency into a sector which has historically been very inefficient. This, combined with the welcome increase in spending around essential infrastructure to unlock unviable sites, will begin to address the blight of insufficient housing numbers.”
Funding issues for social care need to be addressed
Leon Rudd, director of integrated healthcare at Appello: “There’s little surprise Mr. Hammond hasn’t increased social care budgets, but I believe funding is only one of the issues that needs to be addressed. Across both health and social care, professionals have to do more with less, whilst maintaining consistent care levels. We’ve got an ageing population that’s living much longer — it’s a ticking time bomb that’s leading to the month on month increases in delayed transfers of care, so-called bed blocking.
“We need to address how to develop a sustainable and cost-effective care pathway that gets patients back into the home environment and living the life they want to live, safely. The NHS, local authorities, care providers and other stakeholders all need to join up conversations and, I believe, technology needs to be part of that conversation — something many commissioners are yet to fully understand.
“By integrating technologies, taking advantage of connected devices, and delivering an integrated service at scale, it’s possible to empower more personalised, informed and engaged care of patients. Additionally, using insight from technology to empower the decision making process will increase the capacity of care services in the community. The rich data provided by a range of assisted and ambient technologies can be fed back into patients’ care pathways, allowing specialists to make more informed clinical decisions.
“A few vanguard sites are taking advantage of digital monitoring technologies and there are successful pilots. But, these pilots have failed to scale, and today do not integrate the range of technologies currently in use, they assume you can just start again. Ultimately though, if there isn’t the funding for more people, then surely technology must have a place to fill that gap?”
Phil Harris, head of sales at BLP Insurance, comments on the Government’s housing initiatives announced in today’s Autumn Statement and the further measures required to meet critical issues around housing supply:
“The emphasis on delivering both physical and digital infrastructure in today’s Autumn Statement should create opportunities across all areas of the UK construction industry. However, it’s difficult to assess its significance in the absence of any real detail on how the industry will access the proposed £23bn National Productivity Investment Fund.
“Considering the numerous issues that remain within the UK construction industry, namely around the national shortage of traditional skills and rising material costs, encouraging innovation within off-site construction technologies should be top of the list for the Government in delivering its ambitious new housing targets.
“The further commitment to increase and extend annual investment in infrastructure to 1.2% of GDP by 2020 provides much needed clarity on Government priorities for the medium term which will assist local authorities and developers in identifying strategically important development opportunities. This will be crucial in delivering the Northern Powerhouse concept and also unlocking the development potential of the proposed ‘tech corridor’ between Oxford and Cambridge.
“With UK unemployment currently at an 11 year low, it is also vital that consumer confidence is maintained in order to ensure that the demand for housing remains high. The cancellation of the increase in Fuel Tax Duty is one measure which will contribute towards achieving this objective.
“It remains to be seen whether these measures will be delivered despite the prevailing uncertainty around the triggering of Article 50 and the negotiations for the UK to leave the EU. However, it is unlikely that anything announced today will make a significant contribution to solving the ongoing issues of supply within the UK housing market.”