Tory MPs to demand Government skews homebuilding funding formula towards the North

A group of more than 30 northern Tory MPs are preparing to write to the Government demanding a change to the bias of where homes are built in the UK, which they say drastically favours the South.

The MPs from across the North are gathering signatures to a letter to be sent to Steve Barclay, the Chief Secretary to the Treasury, in the coming days, aiming to hold the Government to the levelling up promise made during the election held a year ago, specifically in respect to homebuilding.

Already stung from the lockdowns which have disproportionately impacted the North, the MPs are focusing on the funding formula used by Homes England to administer the Housing Infrastructure Fund.

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This so-called 80:20 rule, which dictates how the central funding is allocated, means around 80 per cent of cash is spent on projects where housing is less affordable, or more than 8.8 per cent times the average household income.

More than 40 MPs have written to the Prime Minister over the formula. Photo: PA

This inevitably means more of the fund is spent in the South, where house prices are higher, meaning the North misses out on new developments.

Of the £4bn so far handed out by the fund, around 83 per cent of it has gone to the South.

Housing Secretary Robert Jenrick has signalled he could fix the issue, and in October said he would “bear in mind” the unfairness.

But signatories to the new letter, including Yorkshire MPs Kevin Hollinrake (Thirsk and Malton), Robert Goodwill (Scarborough and Whitby), Craig Whittaker (Calder Valley), Imran Ahmad Khan (Wakefield), Robbie Moore (Keighley), and Jason McCartney (Colne Valley), will say it is not enough simply to rebalance but the formula must now favour the North.

A part of the letter, seen by The Yorkshire Post, said: “The funding formula used by Homes England for the Housing Infrastructure Fund – the so-called ‘80:20 Rule’ - was structurally biased against the North, with the majority of the funding being channelled toward the South East of England, the most affluent part of the country and by extension the area least in need of the funding support it has been receiving.”

While Mr Hollinrake said: “This Government promised to level up the whole of the country. Rethinking the housing funding formula will send a very clear message to our constituents that they will not be left behind.

“If the Government accepts our proposals, nowhere will be left behind.”

Mansfield MP and fellow signatory Ben Bradley said: "It is not simply enough to eliminate the in-built bias towards the South East, we now need to actively direct the funding to where it is most needed; in the North, Midlands, and South West, in order to achieve the Government's levelling up agenda across the entire country.”

In March housing experts warned that Yorkshire and the rest of northern England are being "frozen out" of vital home-building schemes because of funding criteria which favour London and the South East.

Speaking in the Commons in October, when questioned on the rule, Mr Jenrick said he and Mr Hollinrake "have agreed on this point for some time". He added: "The housing infrastructure fund directs funding to those areas where there is the greatest affordability challenge.

"That is important, in some respects, but any Government who wants to level up must also direct infrastructure investment for housing to other parts of the country as well. I will certainly bear that in mind as we design the successor to the housing infrastructure fund later this year."

It comes after similar accusations were also made about the formula used to decide where new homes would be built in local areas.

Among the names on the letter is that of former Northern Powerhouse Minister Jake Berry, who appeared on the Yorkshire Post’s political podcast Pod’s Own Country yesterday expressing fears the levelling up agenda had slipped down the Government’s agenda.