Housing (Built Environment Committee Report)
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The Parliamentary Under-Secretary of State, Department for Levelling Up, Housing & Communities (Baroness Scott of Bybrook) (Con)
My Lords, I begin by thanking the noble Lord, Lord Moylan, for securing this important debate on the committee’s report. I also thank the noble Baroness, Lady Neville-Rolfe, the noble Lord, Lord Moylan, and the members of the Built Environment Committee for their thorough inquiry into housing demand and the subsequent report. Let me also thank all noble Lords for their contributions today. It has been a very wide-ranging but extremely challenging and interesting debate. If I may, I shall go through the tenets of the report and the issues arising from it in this debate.
I start by saying that housebuilding is a priority for this Government. We are committed to continue working towards our ambition of delivering 300,000 new homes a year. However, our focus is not just on numbers. The types of homes provided, their quality, the infrastructure that new developments need and the communities that they are in all matter very much.
The committee’s report highlighted the need to give full consideration to our ageing population, especially those older people living alone, when developing housing policy. I thank the noble Lord, Lord Best, for all the work he does in this area of housebuilding. My department is working closely with the Department of Health and Social Care and with housing, health and social care stakeholders to assess how we can support the growth of a thriving older people’s housing sector. The affordable homes programme, enabling the delivery of housing for older, disabled and other vulnerable people, is extremely important to this Government. Our older people’s housing task force will also look at ways to improve the choice of and access to housing options for these groups, particularly older people. I understand that this is being taken forward by the new Housing Minister and that a date will be announced for an older people’s housing task force in due course.
Turning to housing types and tenures, our commitment is that there should be enough social homes and fewer families housed in temporary accommodation in this country. That is important to us. We do not have targets because we just make sure that we have enough social homes, particularly family homes, so that families are not in temporary accommodation—this needs repeating. Since 2010, we have delivered over 598,900 new affordable homes, of which over 157,200 are for social rent. The Government are also committed to reducing the need for temporary accommodation by preventing homelessness before it occurs. To this end, we are investing £2 billion in tackling homelessness and rough sleeping over the next three years. These are all issues rightly brought up by the noble Lords, Lord Davies of Brixton and Lord Grocott, the right reverend Prelate the Bishop of Durham, and the noble Earl, Lord Lytton.
The report outlined the importance of home ownership. Since its publication, the Help to Buy equity loan scheme has ended, on 31 October 2022. From the scheme’s launch in 2013, it has supported over 361,000 households to buy a new home and boosted housing supply: 37% of all homes sold using the scheme would not otherwise have been built.
We have also expanded the first-time buyers’ relief by increasing the level at which first-time buyers start paying stamp duty from £300,000 to £425,000. First-time buyers will be able to access this relief on property purchases up to £625,000, compared with £500,000 previously. Our shared ownership and right-to-buy schemes also continue to help people into home ownership and out of the rented sector.
SMEs have a vital role in making the housing market more diverse, competitive and resilient, as we heard from my noble friend Lord Moylan. We have put in place a package of measures to support them. This includes our £1 billion ENABLE Build guarantee scheme to reduce the cost of debt for SMEs. Since publication of the committee’s report earlier this year, we have launched the £1.5 billion levelling up home building fund, which builds on the more than £2 billion of development finance that was invested under the home building fund and continues to support SMEs and new entrants into the sector. Through the Levelling-up and Regeneration Bill, changes to the planning system will support SMEs to build more homes by making the planning process easier to navigate, faster and more predictable.
Many noble Lords brought up issues concerning planning. I particularly thank the noble Baroness, Lady Thornhill, who gave us the real nitty-gritty of what it is like in a local authority and the challenges we have all faced in the planning system—the challenges of what government, local authorities and, in particular, communities want. For me, the important thing that was brought up was the fact that you need to take communities with you. That is what local government is very good at, and we need to spend more time doing that because that is the way we get our local communities supporting the local plans early on; then we get the houses built that they and we need in this country.
The report made several recommendations on the planning system. A number of these recommendations have been addressed in the Levelling-up and Regeneration Bill, which is currently making its way through the House of Commons and will be in this House pretty soon. I will briefly cover these in turn.
The Government continue to stay committed to the planning measures in the Levelling-up and Regeneration Bill as they form a key part of the Government’s response to the challenge of levelling up the country. The Bill will modernise our planning system by putting local people at its heart, which will deliver more of what communities want. The reformed system will champion beautiful design, in keeping with local style and preferences, and ensure that development is sustainable and accompanied by the infrastructure that communities need.
Our reforms will ensure that local plans are under- pinned by better data, making them more transparent and easier to understand. This will enable local communities to more easily influence and comment on their emerging plans. The local plan preparation process will also be more standardised and shorter, supported by streamlined evidence-based requirements to reduce the burdens on local authorities—something for which they have been asking for a long time. The increased ability for local communities to get involved in planning processes will ensure that development is brought forward in a way that works best for local people.
The Levelling-up and Regeneration Bill gives the Government powers to create a new infrastructure levy. This is something else that my noble friend Lord Moylan and other noble Lords brought up. The levy will aim to capture land value uplift at a higher level than the current developer contribution regime, allowing local authorities to use the proceeds to provide the affordable housing and infrastructure that communities need. The levy will deliver at least as much, if not more, affordable housing than the current system of developer contributions. This will be secured through regulations and policy, supported by provisions in the Bill.
There were a number of questions on the levy, which I will try to answer. My noble friend Lord Moylan asked whether the levy will be for only that site. Under the levy, local authorities will be required to prepare a new document called an infrastructure delivery strategy, which will make it much clearer for communities what will be provided and when.
My noble friend Lord Moylan asked a further question on the levy. Local authorities will be able to borrow against infrastructure levy receipts and to build up cash reserves from the payment of the levy—again, something local government has been asking for. This will help local authorities to fund infrastructure that communities need.
Neighbourhood planning was brought up a number of times by several noble Lords. Neighbourhood planning is an important part of our planning system. It will now have greater weight in planning decisions, but we are also looking at allowing local communities to provide a simpler neighbourhood priorities statement which will not take as long. That can then be reflected in a neighbourhood plan as time allows.
We are proposing to make the levy a non-negotiable charge on a fixed proportion of the gross development value. That will reduce the negotiation issues to which, as we have heard from a number of noble Lords, Section 106 agreements are sometimes prone. Greater certainty and transparency around cost and the ability to factor expenditure into the price paid for the land should mean that affordable housing and infrastructure delivery is improved.
The Bill will require housing developers formally to notify the local authority via a development commencement order when they commence development. We are also modernising and streamlining existing powers for local authorities to serve completion notices—sometimes called “build-out”—which I know is very important to a number of noble Lords. These measures will increase transparency on build-out and make it easier for local authorities to take action where slow build-out occurs.
The committee’s report highlighted the importance of local planning authorities. It is vital that we have well-resourced, efficient and effective planning departments. To enable this, we are working alongside the sector to design a suite of targeted interventions to support the development of critical skills and build capacity across local planning authorities. As part of this work, the department is supporting local authorities in the development of new digital tools which will help make planning processes more efficient. We also intend to consult on an increase in planning fees that will help provide additional resources to support the delivery and improvement of planning services.
The committee’s report also suggested that we consider how best to update the calculation of local housing need. As with all policies, we are monitoring the impact of the standard method, particularly the impact of changes to the way we live and work, as that becomes clearer. We are developing policy on this topic and intend to set out further thinking on the direction of travel as soon as we are able to.
Many noble Lords brought up the skills issue. The committee’s report covered the importance of skills in meeting housing demand, and we are working to address skills shortages across the construction industry. The Government are increasing funding for apprenticeships to £2.7 billion in 2024-25. This will continue to support apprenticeships in non-levy employers, often SMEs, for which government will continue to meet 95% of apprenticeship training costs. I thank the right reverend Prelate the Bishop of Durham for giving us the example of Sunderland, where local colleges are taking this up and realise how important this sector is in increasing the skills base.
We are also part of a construction skills delivery group which has agreed new actions, including greater recruitment of apprentices, increased support for T-levels and improved routes into the industry. This work has had real-world impacts already. Apprenticeship starts in the construction sector in 2021-22 reached more than 32,000, exceeding pre-pandemic levels. As part of the building safety agenda, we are also working to develop a suite of national competence standards for individuals working on buildings.
I am conscious of the time. There was quite a lot of discussion on quality and design. As I said at the beginning, it is not just about numbers; it is about quality of housing. The quality of housing is fundamental to the well-being of communities and helps create thriving neighbourhoods. The levelling-up White Paper housing mission outlined the Government’s ambition to reduce the number of non-decent rented homes by 50% by 2030, with the biggest improvements in the worst-performing areas. This will be achieved through new minimum standards for privately rented homes and broader reforms to the social rented sector.
The noble Lord, Lord Berkeley, brought up a couple of issues, particularly on energy usage in homes. The Government are investing £12 billion in the Help to Heat schemes, which will allow investment in the housing stock we already have to make houses more energy efficient—things such as boiler upgrades, sustainable warmth competitions and home upgrade grants. There are grants out there and I am happy to give the noble Lord further details on that.
The noble Lord, Lord Stunell, brought up what we are going to do to make future homes more sustainable. From 2025, the future homes standard will ensure that new homes produce at least 75% less CO2 emissions than those built in 2013. These homes will be future-proofed with low-carbon heating and high levels of energy efficiency. That is an important part of where we are going on new homes.
My noble friend Lord Moylan mentioned modern methods of construction, which I am very interested in because that might be one way in which we can deliver more homes much faster. The report made additional recommendations about modern methods of construction. By embracing MMCs, housebuilders can deliver good-quality, energy-efficient new-build homes more quickly. The Government are working to address strategic barriers, notably the lack of component standardisation across the industry and the difficulties in obtaining product warranties, and therefore insurance and mortgages. The work we are doing will continue to provide assurance around the quality and safety of MMCs to bring them on to the market.
To conclude, I thank all noble Lords once again for their contributions today.
Viscount Waverley (CB)
It is getting late, but will the Minister kindly undertake to give the Government’s considered view on the whole question of possibly district councils, and certainly the national Government, having a key role in the decision-making over central infrastructure projects when it comes to planning permissions being given for the housing? I do not expect one now, but will the Minister kindly undertake to give a really considered view on that and write to me?
Baroness Scott of Bybrook (Con)
I was going to mention the noble Viscount and the issues of large infrastructure, such as airports, before I finished.
I thank my noble friend Lord Moylan for moving the debate and look forward to continuing the discussion and working collaboratively on the issues raised with noble Lords and the committee as it moves forward. The time is getting late. I know I have not answered everybody’s questions, but I will take a long look at Hansard, put out a letter to all members of the committee and put a copy in the Library.