Rishi Sunak’s decision as chancellor to put the lid on a Comprehensive Spending Review (CSR) meant the country hasn’t had a multi-year forecast on public spending since George Osborne in 2015. This is three Conservative chancellors ago in modern money.
Long-term planning is clearly economically as well as politically out of the question. Perhaps not surprisingly so, in the middle of what seems like a resurgence of COVID, and before harsh choices and trade-offs on tax rises and spending cuts are finally determined as part of an unprecedented fiscal consolidation and rebalancing act.
Like much of our improvised and patched-up 2020, this wasn’t the original plan. At the tail end of July – just after the CSR was first announced – chief secretary to the Treasury, Stephen Barclay, outlined a determination that the Exchequer would drive a faster and smarter culture in overcoming Whitehall’s slow and siloed system and getting resources deployed to maximum effect. Branding his set of Treasury colleagues as ‘new radicals’, Mr Barclay promised to address the stubborn problem of higher UK capital costs and boost placemaking through a drive to digital and better application of data-science, modelling and analysis.
As a retread of Ronald Reagan’s famous lines, perhaps the most frightening words in the English language are: ‘I’m the man from the Treasury and I’m here to help.’ But what can the Treasury do to throw a big arm around a housing arena which has seen a momentous halving of new starts since the pandemic began?
Ironically, money seems to be the least of the problems. Government itself can borrow at historically low levels – although the situation of national debt figures approaching historical highs of £2 trillion militates against this. On the other side there is seemingly no shortage of capital available for housing. However, the absence of full surety of the £100bn to be allocated in regional growth schemes underpinned by the National Infrastructure Commission, let alone the fate of the Shared Prosperity Fund, might have knock on effects in delaying certain schemes.
The Treasury view has traditionally been that planning is gumming up the housebuilding taps. This analysis survives confrontation with the fact more than nine in 10 planning applications are passed and a million homes for which permission has been granted remain unbuilt. Hence support for ‘Planning for the Future’ and its agenda to dismantle the post-war consensus and air of Butskellism through a mix of zoning and nationally set algorithms – hopefully of the non-rogue variety.
Whether the centre’s zeal for these reforms will assuage backbench concerns over the impact of national housing targets on constituencies, and what the increase in new builds may portend for areas of high demand in the south east, is another matter. Regardless, it seems difficult to see how the Johnsonian ambition to ‘build, build, build!’ a target figure of 300,000 new homes can be achieved on such uncertain foundations.
As to what types of housing, the Treasury view, radical or otherwise, seems resistant to social rent homes, but blithely content to fund an ever-burgeoning housing benefits bill – one which outstrips public housing investment by a ratio of more than three and a half times. But social housing on its own is not and cannot serve as the be all and end all. So much has changed since councils last built out homes at scale five decades ago.
Mixed tenure and spreading things around must be a better route to recovery which will require a mix of the tried and the trusted with the radical and the innovative. A traditional lament is that housing civil servants are incrementalists when we need transformationalists – but quick political fixes are best avoided. Hopefully something will be learned from the fiasco of the Osborne era’s 2015 Starter Homes programme, which at a cost of £173m failed to build a single home at a 20% discount to a single first-time buyer under the age of 40.
Instead any hope we have of restoring a home-owning democracy, even of a shared ownership variety, will depend on Homes England stepping up from serving as banker to adviser. In this capacity their strongest role would be to set a framework for long-term investment to let our local authorities use their land assets, borrowing, investment and convening powers to build partnerships as master developers.
When interested parties next get a chance to dust down their recent CSR submissions, they should firmly restate the case that the next multi-year funding settlement must be an opportunity to fix chronic housing shortages. Successful collaborative housing partnerships require the right set of regulatory tools and fiscal flexibilities to do the job. As the New Radicals had it in their infectious New Wave revival one hit wonder smash: ‘You get what you give’.
Jonathan Werran is chief executive at Localis