Is this what we voted for?

“We are fixing the housing crisis in this country,” the Chancellor of the Exchequer Rachel Reeves said on Monday, as she announced – wait for it – up to 18,000 new social and affordable homes.

 

For a statement intended to ‘sweeten the pill’ of the Spring Statement – which included benefits cuts that will affect more than 3m households – it left a bitter taste. Let’s put that up-to-18,000 figure in perspective. There are more than 1.3 million households currently waiting for a social home on a local authority housing register.

 

Reeves’ cuts to welfare benefits are expected put 250,000 more people, including 50,000 children, into relative poverty after housing costs by 2030, according to estimates by her own Treasury. Three key words in that statistic: After housing costs.

 

So while this might be, as deputy prime minister Angela Rayner enthuses, the “biggest boost to social and affordable housing in a generation” – it rings like a donation to the spittoon.

 

 

Even by the standard of political promises, the offer pales: Mayor of London Sadiq Khan has pledged to build 40,000 affordable and social homes by 2030 – in London alone. (Indeed, London councils have already delivered 23,000 affordable and social homes directly funded by City Hall since 2016.) Manchester City Council promises to build 10,000 affordable and social homes by 2032.

 

Just 18,000 homes for all of England? Of course, this represents a tiny proportion of Labour’s promise to build 1.5m homes. But does that mean the other 1.49m homes will be unaffordable?  

 

The commitment of £2bn is quite simply too small to make a meaningful difference in the face of more cuts to public services and the hacking away of people’s standard of living. The meanness of treasury contributions alongside welfare cuts has left the industry asking, "Please ma’am, may I have some more?"

 

Poverty has a catastrophic effect on people and children – and more than any other factor, healthy and well-housed humans are essential to economic growth. We know this; Reeves must know it too. 

 

As for retrofitting homes, the £3.4 billion committed in last year’s budget to retrofit is welcome, but again too small. Simon McWhirter, deputy chief executive at the UK Green Building Council, says it best: “The current proposals are simply far too anodyne and much more bravery is required.”

 

 

What would be brave? Relaxing those fiscal rules. Leading economists have been urging Reeves to scrap them and raise taxes in lieu of cuts to welfare. As David Blanchflower, a professor of economics at Dartmouth College in the US and a former Bank of England policymaker told The Guardian, “In a world where exchange rates are changing, the tariff rules are unclear, and uncertainty is prevailing, you probably want to loosen your hand on the tiller and try to worry about the major issues that you have, which is not the fiscal rules.” 

 

Housing is that ’major issue’. While Kate Anderson, Chief Executive at the National Housing Federation said the £2bn announcement was “hugely welcome” to prevent “a cliff edge in the delivery of new homes” she made clear it’s not enough – the NHF is focussed on the outcome of the next funding programme: “We hope to see a significant increase in funding for affordable housing at the Spending Review, alongside a package of support to help the social housing sector rebuild capacity, so we can build the homes we desperately need," Henderson said.

 

With the Affordable Homes Programme for 2021-26 wrapping up, until the future grant investment is confirmed, the property industry will continue to hold its breath. Trouble is, it hasn’t inhaled for two years: The motto sung from early 2024 was “stay alive until ‘25”. Now I’ve been told it’s “stay in the mix til ’26.”

 

What’s needed is money – lots of it. The change in government brought hopes of an end to economic uncertainty and political instability. That’s not exactly what’s happened. But at the very least, central government funding is needed to alleviate the £4.6bn hole in local authority budgets. The National Audit Office has warned almost half of councils in England risk falling into bankruptcy. The Local Government Association has warned that councils will face a funding gap of up to £8bn by 2028-29.

 

 

If Labour truly wants to be the “party of work”, it needs to restore the social contract by funding local authorities and ensuring people have access to adequate public services, housing and welfare. Reeves cuts and meagre offerings are making it hard to hold on to what’s left of the compact.

 

“The reality we face is that the essential services people rely on every day are being pushed to breaking point. We expected more time and attention to be given to these concerns in this Spring Statement,” says Ann Carruthers, President of ADEPT.

 

“Place-based services – from roads to waste collection, housing and green spaces – are integral to supporting healthier, more sustainable communities that subsequently deliver the desired growth and prosperity the government has aspirations for.” 

 

There are fears the funding gap might see local councils selling off more land and municipal property. “No doubt it will be tempting to sell municipal assets for quick cash, but this short-term thinking will have a long-term, devastating effect on local government’s ability to stand on a stable financial footing, not to mention the negative impact on the wellbeing of our local communities,” says Chris Smith, Head of Kajima Community.

 

What might ambition look like from the Treasury? A greater financial commitment to social housing and retrofit. McWhirter points to the still-not-enacted Future Homes Standard, too – so that homes being built today won’t need to be retrofitted later: “The Chancellor previously said there was ‘no trade-off between economic growth and net zero’, but we need to see these goals embedded in a long-term strategy.”

 

The overall number of empty homes in England has risen to an incredible 998,784 – including 265,000 long term empties, vacant for more than six months. Three charities, Crisis, Shelter and Action on Empty Homes are calling for a strategic approach to bring these homes back into use. 

 

“Retrofitting empty homes is faster, cheaper, and greener than new builds. It’s an opportunity to create affordable, energy-efficient hosing and boost local skills,” says Rebecca Moore, Director of Action on Empty Homes.

 

“The government must respond with funding and incentives to bring these homes back into use. Homeless families can’t wait ten years for new developments – they need homes in their communities now.”