Clive Betts: Our housing policy must be built to last

I WAS consistently critical of the new housebuilding record of the Labour governments in the first decade of this century.
Successive governments have not built enough houses, says Clive Betts.Successive governments have not built enough houses, says Clive Betts.
Successive governments have not built enough houses, says Clive Betts.

However, their huge Decent Homes programme ensured 1.4 million homes were made fit for the 21st century. Without that investment, the housing crisis would be even worse than it is.

But the Conservative and Lib Dem coalition Government’s performance from 2010-15 was dramatically worse. We saw rising homelessness, falling home ownership, escalating rents, deep cuts in investment and the lowest level of house-building since the 1920s.

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Even in its worst performing year, the Labour government built more homes than in the coalition’s best year.

The election of a Conservative government last year saw David Cameron promising to deliver one million new homes during this Parliament. Well, that’s what his media team briefed to ensure that it was plastered over the front pages of all the national newspapers.

Yet, within weeks, my questions to the Housing Minister confirmed that David Cameron wasn’t making a promise after all. In fact, I discovered that it wasn’t even a goal or a target but, at best, it was “an ambition”. I said at the time and I’m happy to repeat now – there is absolutely no chance of that ambition being realised without a huge change in a whole number of the Government’s housing policies.

Last month, the Government’s own statisticians reported that construction output was 1.9 per cent lower than the same time last year. Housebuilding was the worst-performing category as total new housing fell by 3.2 per cent compared to the previous month.

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This was the third consecutive period of month-on-month falls in total new housing. Compared to a year ago, there was a small increase in private new housing, but this was massively outweighed by a fall of 18.9 per cent in public new housing.

Why has new social housing development dropped so dramatically when, in 2012, the coalition Government had promised that there would be a massive increase over the next decade?

Recently, a joint report from the independent Chartered Institute of Housing (CIH) and the independent Chartered Institute of Public Finance Accountants (CIPFA) gave us the answers.

Until 2012, council housing finance was controlled by the Government. At that time, council housing was generating a huge financial surplus – which it was paying into the Treasury. However, because of government controls, fewer than 200 new homes a year were being built. Long negotiated reforms led to a new long-term settlement in April 2012.

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Effectively, councils took on £13bn of extra debt to become ‘self-financing’ and to increase investment in new homes. The coalition Government made several promises to seal the deal. Because of the additional risk, financial certainty was crucial. But the new 30-year business plans would only stay robust if income could reliably be forecast.

Since then, the Government has driven a coach and horses through the promises it made about income to support new housing. The most significant of these broken promises are:

Cutting rent levels for social housing (to try to balance its own books and reduce headline inflation) when it had consistently demanded that they should rise to market levels;

Forcing and encouraging the sale of social houses;

Providing absolutely no Government funding for new council or housing association rented homes over the next four years.

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The result of this is that, instead of being able to finance the building of 550,000 homes over 30 years, it is now predicted that just 45,000 homes can be afforded. Six months ago, I forecast that, by the end of this Parliament, there will be a lower percentage of homes that are owner occupied, there will be fewer social rented properties and we won’t have built the million homes that David Cameron promised. The prospects today are even bleaker.

David Cameron’s then Minister of Housing, Brandon Lewis, was a strong supporter of Theresa May in the Tory leadership contest. Recently, he was suggesting she would follow Cameron’s housing policies. That would be a disaster.

Mrs May has now said “we need to do far more to get more houses built”. She is absolutely right. She now needs to change the Government’s housing policies as thoroughly as she has changed her Cabinet.

Clive Betts is the Labour MP for Sheffield South East and chairman of the Communities and Local Government Select Committee.