Labour’s confirmation of plans to reform the planning system and build 1.5 million homes in the King’s Speech has further demonstrated its commitment to creating positive change for the social housing sector. However, there’s a lot of work ahead.
Grappling cost spikes, high interest rates and skills shortages is business as usual for many registered providers, so what actions must the new Government take to deliver real change for the social housing sector?
Establish economic stability for social housing
Economic growth is high on the new Government’s agenda and will in part be fuelled by the proposed reform of the planning system and land development policies. Economic stability is essential for the social housing sector to thrive and will enable registered providers to plan for the long term and invest in the future. Promisingly, the bond market is showing early signs of returning to normal – an indication that investors are welcoming the change in Government.
However, if plans to build new infrastructure are to boost economic growth, they must be realistic and realisable to work. For instance, a clear funding plan for new homes is urgently needed amid a climate of high construction costs and labour shortages. Equally, there is a need for investment in ageing social housing stock, most of which dates back to the post-war era and is in need of extensive and expensive maintenance to be fit for purpose.
Local government will play a fundamental role in realising new infrastructure, and therefore economic growth, so it’s crucial that Labour sticks by its plans to support local authorities throughout planning reform. This includes:
- Recruiting 300 planning officers
- Addressing barriers to recruiting professionals into the public sector
- Introducing new planning codes to streamline application processes
- Reforming compulsory purchase orders (CPOs) alongside the integration of new planning officers to speed up developments
Local government could have a greater role in the housing delivery space too with grant funding going directly to councils. As not-for-profit, charitable entities, registered providers should be the natural delivery partner of councils and therefore support them in reaching their development ambitions. This includes both the delivery and management of new homes.
Confirm next steps for housebuilding targets
With the huge task of delivering 1.5 million new homes imminent, time is of the essence. In these first few months of office, the new Government needs to outline precisely where and how the homes will be built, and clearly define the responsibilities of key players, such as local government and developers. Using reformed CPOs to jumpstart stalled developments would be a strong start, as would ensuring developers pay the true price of development.
Many councils are still struggling with the current funding structure and would benefit from a move to multi-year settlements, tied into a requirement for councils to show they have fulfilled their housing targets. Whilst this structure wouldn’t guarantee councils more funding, it would enable them to improve long-term planning and proactively support the introduction of new infrastructure.
There is also a need for the new Government to confirm where its five new towns will be built. Labour has previously indicated it knows where these will be located so there’s no reason for these plans to be delayed.
Rethink regulatory control of the social housing sector
Whilst revising regulations in social housing is not a high priority for the new Government, it should not be forgotten. Recent updates to the Consumer Standards are weighing heavily on registered providers with many feeling that total compliance is not possible; there is a sense it won’t benefit tenants and their satisfaction with their landlord. A review of new regulatory changes could help to level the playing field and ensure all registered providers are treated fairly.
It was positive to see the extension of Awaab’s Law to include the private sector announced in the King’s Speech, but there is still room for the legislation to be revised. Whilst critical for safeguarding the health and wellbeing of tenants, the broad scope and all-encompassing nature of Awaab’s Law are seen as detrimental to its effectiveness.
It would also be promising to see Labour do more with the Leasehold and Freehold Act 2024. Whilst some of the Act’s provisions came into effect in late July, it will be up to Labour to implement the rest. The Act didn’t bring forward all the reforms recommended by the Law Commission and promised by Labour, so the introduction of the Leasehold and Commonhold Reform Bill to achieve this is promising and must be undertaken.
The actions that unfold over the coming months will have a huge influence on the future of social housing. The Government has an opportunity to progress the sector for the better, but it will need to lay down a well-defined path if any of its plans are to be realised.
For more information
For more information, contact Jonathan Cox.