Bigger questions lie behind public land failure

Originally published on July 24 on my blog for Inside Housing.

The government has wasted a ‘once-in-a generation opportunity’ to tackle the housing crisis by failing to develop a strategy for disposing of public land.

That’s the damning verdict on the much-vaunted Public Land for Housing Programme from the Public Accounts Committee (PAC) this morning (Wednesday).

The MPs find that by 2020 the government will have sold land for just 69,000 of the 160,000 homes it promised in England between 2015 and 2020 – and even that estimate relies on some heroic assumptions about progress over the next 12 months.

A second target to deliver £5 billion of receipts from the sale of surplus public land over the same period will be met – but only because of the £1.5 bn sale of Network Rail’s railway arches in February that was not part of the original programme.

When you consider that is happening in the middle of a housing crisis and in the wake of an austerity drive that has been closing public services around the country, that is an abject failure.

And those headline figures only tell part of a story that has an ever bigger failure to deliver affordable housing at the heart of it.

For starters, as the MPs point out with understatement, there is an inherent tension between the two targets: you can seek to maximise the receipts from land sales or maximise the number of homes in general, and affordable homes in particular, delivered but not both.

Next, the programme’s achievements tend to melt away when you look at the detail.

In a report on the 2011 to 2015 sales programme in 2015, the PAC found that some of the sales date back to 1997, that some of the homes already existed and that the government was not even counting the number of new homes built.

The net result is that just 40,500 have been delivered from public land since 2011 under the two programmes so far and even that total is inflated by an ‘unacceptably loose definition of what actually constitutes a new home’.

That total of 40,500 includes 4,000 pre-existing homes that were simply transferred from the public to the private sector and 12,500 that were built on land sold before 2011.

Things have improved in the second programme but not by much – promised annual reports on the programme have only appeared intermittently because of the turnover of housing ministers.

Worst of all is the ‘unacceptable’ lack of attention that the MHCLG pays to how the release of public land could be used to deliver affordable housing and homes for social rent – something the PAC says should be a key objective.

MHCLG does not place any specific requirements for what should be built on the land in most sales – the exceptions are some sites used by the NHS for homes for key workers and some sold by Homes England under conditions on future use.

It is (at last) about to release data on the number of affordable homes delivered – but this will be based on those planned rather than actually built.

The MPs cite written evidence from the National Housing Federation (NHF) that 42% of new homes built in England need to be affordable to meet housing need but that in 2017 we only achieved 23% across housebuilding sites as a whole.

However, delivery on public land was even worse: just 20% of those due to be built on are likely to be affordable and as few as 6% will be for social rent.

The report makes a series of recommendations designed to ensure that the government has a robust strategy in place on all these points, produces data with more transparency and monitors what happens on the ground.

However, the fiasco begs a series of much bigger questions about the government’s approach to public land and housing.

As Brett Christophers detailed in one of my books of the year for 2018, sales of public land amount to the biggest privatisation you’ve never heard of: around 10% of the land area of Britain has been sold since the 1970s and the Public Land for Housing Programme is just the latest example.

His broader story also takes in the Right to Buy and estate regeneration but it springs from the same assumptions about putting ‘surplus’ public land to more efficient use in the private sector.

One of the clearest demonstrations of the flaws in that thinking came with the sale of Ministry of Defence housing to Annington Homes for £1.67 bn in 1996.

Those same homes are now worth £6.7 bn and a 25-year agreement to let them to military families at discounted rents runs out in 2021.

But another is one of the few ‘successes’ in the latest public land programme, that £1.5 bn sale of railway arches to earlier this year.

The sale raised more than originally expected and the National Audit Office found that it offered value for money in the narrow terms but that it did not consider wider government policy objectives.

Among these are the fact that most of the arches are not ‘surplus’ at all but occupied by businesses whose rents are due to rise by 54% in the next three to four years thanks to those private sector efficiencies.

Very similar arguments apply to the Public Land for Housing Programme and lack of concern about its own wider objectives.

MPs on the PAC asked the MHCLG why it did not set a specific target for the number of affordable homes to be delivered under the programme.

‘The Department told us that while this was something that it could do, this would be a policy decision and could create a risk that affordable homes are concentrated in specific locations which might not create “great communities”.’

That is a remarkable answer given the way that the MHCLG has broadened the definition of ‘affordable’ to include everything that is not at the full market price.

If you take a development with homes for social rent, intermediate rent, shared ownership, shared equity, co-operative ownership, community land trusts and maybe even a few starter homes, I could quibble about how affordable some of those really are.

But that mix sounds like a definition of a ‘great community’ to me – and a great model of how to deliver long-term value from public land.

For all the hopeful signs from Scotland and from Labour’s plans for an English Sovereign Land Trust, and for all its fine words about the value of social housing, the Westminster government is still stuck in the same mindset. That failure of imagination is the biggest failure of all.

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