The levelling up of MHCLG

Posted: September 23, 2021 | Author: julesbirch | Filed under: Housebuilding, Levelling up, Planning | Tags: DLUHC, MHCLG |1 Comment

Originally published as a column for Inside Housing on September 23.

So it’s farewell to the Ministry for Housing, Communities and Local Government and hello to the Department of Levelling Up, Housing and Communities. 

As rumoured last week, we have new brass plates and stationery to go with new secretary of state Michael Gove at Marsham Street and its new office in Wolverhampton. 

So what’s the difference between MHCLG and DLUHC? First, and most obvious, is that top billing for levelling up, as DLUHC becomes the unpronounceable in pursuit of the undefinable.

Second, it’s worth remembering why the rebranding to MHCLG seemed so significant when it happened three and a half years and three secretaries of state ago. 

It was not just the H in the title, it was the way it was a deliberate echo of the 1950s and 1960s, when the two main parties competed with each other to build more council houses, and Macmillan rather than Thatcher seemed the reference point for the Tories on housing.  

Third, an important caveat to that: although relegated to second billing, housing is still there in the name, which is more than can be said for its predecessors since the 1970s. 

Within a department with significant extra responsibilities (not just levelling up but preserving the union as well) housing is at least still a priority of sorts. Local government has disappeared. 

Since the top-level reshuffle of the Cabinet last week, we’ve also had confirmation of the ministerial team at DLUHC. 

For better or worse, Chris Pincher remains as housing minister, providing some continuity and making him a bit of a veteran in the post after serving an incredible 19 months, supported by Eddie Hughes on homelessness and Lord Greenhalgh on building safety. 

The responsibilities of new minister of state Kemi Badenoch remain unclear although she describes herself as both minister for equalities at the Foreign Office and minister for levelling up at DLUHC. 

The most intriguing new appointment, though, could be Neil O’Brien as junior minister. Like Gove, he is ex-Policy Exchange but he is most recently associated with another right-leaning think-tank, Onward. Logically, his main role will refining his work at Onward on defining levelling up ahead of an upcoming white paper. 

As I wrote in May, there should be opportunities ahead on that, especially in decarbonisation, but if the metric used is the regional distribution of public investment there are also reasons to fear the consequences for affordable homes in expensive areas like London and the South East.

However, the first report he published at Onward in 2018 was on housing and its conclusions make for interesting reading now on Tory thinking. 

Among the recommendations was a new programme called Homes for Younger People to create a million new home owners over the next decade, 500,000 through help with deposits and 500,000 through new discounted rental properties that would enable young tenants to build up to shared or full ownership.

The kicker was where the money would come from: ‘Fund it through capturing more planning gain and by transferring the remaining local authority housing stock to housing associations.’

Unusually, the recommendations went beyond the case for building more homes to argue for structural reforms of the land and housebuilding markets, new towns and new compulsory purchase powers for local councils.

He also argued for reform of property taxation and a new taskforce between the Treasury and the Bank of England with explicit powers to dampen house price inflation.

That broader agenda very much tallies with what Gove has been telling Tory MPs, according to one report.   

His first priority on housing will surely be to defuse the row over planning reform with backbench Tories, and a pause has already been announced. However, James Forsyth, the well-informed political editor of The Spectator, wrote in his Times column that:

‘Those MPs who have discussed planning with Gove in recent weeks have been struck by his emphasis on the fact that only 15 per cent of the house price inflation of the last two decades comes from a lack of supply. This suggests Gove regards tweaking rules on credit and buy-to-let as being as important, if not more so, than releasing more land for development. It is worth remembering that there were more second homes bought in the decade after the financial crisis than there were new homes built.’

A positive reading of this would be to welcome the new secretary of state’s recognition that housebuilding alone will not be enough to fix housing and that we need wider structural reforms as well.

A more negative one would detect a convenient argument for downgrading the commitment to 300,000 new homes a year and therefore the changes to planning needed to achieve it. It may be a flawed target but up to now it has been agreed across government and keeps things moving in the right direction. 

For an interesting pre-market take on the options for Gove now, see this piece by John Myers. 

Gove’s second big housing priority will be to find a way to fix (or at least neutralise) the building safety crisis that dogged Jenrick and MHCLG. If he needed any reminding, apart from an apparent instruction from Boris Johnson, the day of the reshuffle was marked by a rally of leaseholders and cladding campaigners in Westminster. 

Throw in standards in social housing, homelessness and the impact on the poorest tenants of the end of the £20 a week uplift in Universal Credit just as food and energy prices soar and the problems facing the department continue to stack up regardless of its name. 

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