Holding the government to account

Originally published on April 28 on my blog for Inside Housing. 

The housing crisis could persist ‘for decades to come’ unless the government shows more urgency and ambition on supply.

That’s the verdict* from an all-party committee of MPs on Friday in one of a series of reports due to be rushed out in the next few days as Westminster clears the decks for the election.

The Public Accounts Committee says:

‘
We are highly concerned by this lack of urgency and ambition, most of all in view of the rising costs, both human and financial, of homelessness. Not only does becoming homeless people represent a terrible blight on people’s lives, it also places additional strain on public spending: councils’ spending on temporary accommodation amounted to £840 million in 2015–16, a real-terms rise of nearly half (46%) in just five years.’

The report is a follow-up to one from the National Audit Office (NAO) on Housing: State of the Nation in January. As I blogged at the time, that revealed that moving the end date for the government’s target of a million new homes from May to December 2020 meant it could be met by building fewer than were delivered last year.

In the wake of that report, says the PAC, the DCLG shifted the goalposts back to the end of the parliament in May 2020.

But now Theresa May has moved the entire stadium. The snap election means the parliament ended on Thursday and it remains to be seen whether the target itself now gets quietly dropped.

We won’t know the make-up of the new parliament until June 9 but barring something totally unexpected it seems certain to be much bluer than the old one.

So it is significant that this new report is that it MPs from all parties signed up to it, including Conservatives. And it also seems written to lay down markers for the next five years.

First, the MPs skewer the DCLG for acknowledging that the housing market is ‘broken’ at the same time as it relies on the same market to deliver its ambitions.

That does not just mean relying on a few large housebuilders to deliver most new homes but leaving housing associations increasingly dependent on the private market too via development for sale:

‘Even where the market remains buoyant, the requirement for social housing providers to build for sale could induce them to build luxury developments, out of the reach of local people.’

At the same time, of course, borrowing caps prevent local councils doing more. The MPs demand that the DCLG should ‘write to us within six months with estimates of how many homes councils will be able to build up to 2020 under current financing arrangements’ and with details of what other measures councils can use to develop new homes.

Second, the MPs note that the targets the government sets itself are ‘backwards-looking’ and that the DCLG ‘did not want to be held to account on the basis of a projection of progress towards achieving its targets’.

While the million new homes (or net additions) target is always in the future, the report reveals that the DCLG does not have any targets of the additional homes that will be built as a result of the white paper.

And the criticism also applies to the one-for-one replacement pledge for homes sold under the Right to Buy:

‘The Department conceded that to continue to meet this commitment it would need to see an acceleration in the construction of new council homes, but nevertheless considered that “We aren’t actually behind yet”, given that the time allowed to meet this commitment had not yet expired.’

They say the DCLG’s Single Departmental Plan should include the cumulative total of net additions since the beginning of the million homes ambition and show how many more are needed in future years.

And it should set out how its individual programmes and spending are contributing to the target and make clear how many of the homes are additional to what ‘the market is likely to have delivered in any case’. (I take this as a shot across the bows of Help to Buy).

Third, and most intriguingly to me, the MPs demand action across the whole of the housing budget, including the three-quarters of it that is spent on housing benefit.

They note that £8.4bn in housing benefit goes to housing associations that use their rental income to borrow to invest but that neither the DCLG nor DWP ‘is able to quantify the impact of this funding on the construction of new homes’.

And they say the departments should report back to them within a year on metrics to establish the full impact of housing benefit on the construction of new homes and the scope for it to be used more innovatively to increase housing supply and home ownership.

That sounds like to me as though the PAC is putting ‘bricks and benefits’ arguments firmly on the agenda for the next parliament.

And it also opens up another agenda: the link between housing benefit and standards in the private rented sector.

Some £8bn of housing benefit goes to private landlords but none of it supports new homes and 29% of private rented homes are below the government’s own ‘decent’ standard.

The MPs say the DCLG should commission research into how many non-decent homes are subsidised by housing benefit and how to use the funding to raise quality.

Do recommendations from a select committee in the old parliament matter when the make-up of the new parliament is set to look very different?

Will housing matter to a new government whose priorities will be Brexit, Brexit, Brexit?

On the surface, the answer has to be no to both questions. Beneath the surface, though, here are MPs from all parties opening up new ways to hold the government to account and new ways to lobby for action on housing.

A government that demands accountability and value for money from housing organisations seems strangely reluctant to offer the same for its own performance. Can it continue to get away with it?

*And of the DCLG itself given that the warning about ‘decades to come’ is based on a quote from evidence to the committee from its senior civil servant.

PAC chair Meg Hillier asked Melanie Dawes when provision of new homes would match demand for them from new households. ‘If they don’t meet at some point, this problem will never resolve itself. That is my point.’

The DCLG permanent secretary replied:

‘It will continue as it has done for decades, I agree, and that will show itself primarily in affordability and in some places in homelessness. I am simply being honest with you. For something on this scale and of this magnitude, we do not have some neat line that tells us when those paths will cross.’