Three months on
01/07/10
Sarah Davis, CIH Senior Policy Officer, gives an overview of the new government, its initial ideas and comments - and potential implications for the South East.
Now that we're nearly three months into the new coalition government, what kind of picture is emerging for the future of investment in housing, and the impact for our sector? With the programme for government, several announcements on cuts and the budget, it is becoming increasingly clear that we're facing bumpy times ahead, to say the least.
The government's critical and overwhelming focus is reducing the deficit, although it's keen to emphasise concerns in maintaining frontline services - of which health is clearly number one.
Grant Shapps, Housing Minister, has already said that 'the coffers are empty' in relation to housing while reiterating the traditional conservative focus on raising home ownership aspirations. But the reality is that, with profound cuts to public services likely, many more will be unable to meet that aspiration, and the demand for social housing will grow.
At the same time, restrictions to the Housing Benefit Bill announced in the budget will bring additional pressure on household budgets for some of the most disadvantaged that the sector supports.
The mantra of the Secretary of State for Communities and Local Government, Eric Pickles, is localism and devolution. And already, anecdotally, some housing developments have hit the buffers. CIH supports local authorities' key involvement in shaping their communities, but there is concern that the voice of a vocal, articulate minority will make it a long and more problematic experience to progress the housing developments we need. In some cases there are real worries that much-needed developments will stop - in spite of the evidence of need.
The South East has the highest level of people who believe that their children won't be able to live in their community because of the lack of affordable housing (36%). In spite of that, it also has a higher-than-average level of opposition to local building - 23%. More opposition is found where there are higher proportions of people owning their homes outright (28% compared to a 26% baseline).
In the face of such opposition, incentives like matching council tax receipts to encourage development are likely to have a limited effect. This incentive will probably get more take-up in the areas that need it less, simply because there will be less opposition. And by removing the regional planning level, supported schemes for less politically-acceptable groups may be pushed out of areas altogether. This will lead to more strain on sustainable communities and an increased risk of anti-social behaviour.
Local government funding cuts of £1.165 billion, capping council taxes, and removing all ringfences for special grants mean cash-strapped councils will have a hard time arguing for investment in specialised services compared to other services used by the whole community.
And it's not just within funding that the sector faces major challenges. The localism agenda may shift the relationship balance between local authorities and the Homes and Communities Agency. This is already being proposed in London, but may happen more widely too. And where the regulator will sit and the extent of its remit (beyond economic regulation) will also influence the way the sector works.
CIH is a strong supporter of the importance of co-regulation and sector-led improvement, as well as tenant and customer-focused services. With all these changes, the sector must continue to focus on delivering its core services well, and managing the balance between efficiencies and improvement through a robust tenant involvement approach. As more people will need the services of a strong housing sector, we still need to try to think outside the box - how we can invest in and deliver more quality housing, and maximise the use and benefits of our stock.
Demonstrating the value of good housing to our partners in health, social care and education will be more important than ever, to try and lever in investment wherever possible, for improvement, adaptations and new housing - all critical for long-term sustainability within communities.
Read the full briefing on Government announcements, including the budget: www.housingfutures@cih.co.uk.
Sarah Davis, CIH Senior Policy Officer