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Billions and billions: spending review

26 November 2020

Without adequate funding and staffing levels, applications will continue to take an age to be determined.

The Government told us its shopping list for the year ahead in a ‘Spending Review’ this week. These are usually given in March ahead of the financial year starting in April. Obviously, we’re in far from usual times, and that’s why the Chancellor – Rishi Sunak – is updating the position he gave earlier this year.

Readers will have seen the major headlines: cuts to the overseas aid budget, public sector pay freezes, budget boosts for the NHS and military, and a ‘levelling up’ fund.

But what about housing? Never one to shy from an overstatement, soon-to-be-former President Donald Trump sums it up: billions and billions. Numbers are being thrown about, but what does it actually mean – are Sunak’s numbers simply Trumpian politics? All glitter and no substance?

MHCLG has announced a new National Home Building Fund – £7.1bn – to unlock up to 860,000 homes. However, I’m afraid to report £4.8bn of that is old news. So really, it’s a £2.3bn increase. Not to be sniffed at, but re-announcing old spending promises as new money gets on my nerves.

£2.2bn of that new £2.3bn investment will go towards a new borrowing fund for housebuilders. The leftover change (£100m for those who are terrible at maths like me) will be distributed to combined authorities (those without Mayors) next year. It’s earmarked for cleaning-up brownfield sites, estate regeneration and selling public land.

The money above is separate to the £12.2bn Affordable Homes Programme.

No news on an extension to the stamp duty holiday, but housebuilders, millennials and Gen Z will be pleased to hear that Help to Buy is getting another £5.3bn to spend through to 2023.

Right, boring bit over, what does this mean for the sector?

The added £2.2bn to the National Home Building Fund is welcome. I’m hoping that the finance loans will help small to medium-sized housebuilders expand their capabilities and start unlocking those equally small to medium-sized sites, which help local authorities to chip away at housing targets.

The £100m for non-mayoral combined authorities to get land and estates ready for regeneration is inadequate. Granted, it’s on top of £400m issued to mayoral combined authorities earlier this year, but the sector knows that appraisals, surveys, consultation and remediation works are expensive. Politicians can bang on about ‘brownfield first’ all they like, but until attention is firmly focused on this goal, it’ll continue being less risky for developers to take a punt on greenfield sites.

There’s also a massive elephant in the room. No word on local authority spending other than a pitiful £12m for administrative costs to get ready for the planning reforms. Without adequate funding and staffing levels, applications will continue to take an age to be determined. It’s not in anybody’s interest to have officers juggling dozens of schemes which need their full attention.

Having said all that, we should welcome the fact that the Government recognises the sector needs investment, support and political attention, though it would be nice if planning authorities were promised some of Sunak’s billions.