Building More Homes (Economic Affairs Committee Report)

Baroness Eaton Excerpts

Thursday 2nd March 2017 Lords Chamber

[Baroness Eaton (Con)]

My Lords, I start by declaring my interest as a past chairman and current vice-president of the Local Government Association. It is a pleasure to follow the right reverend Prelate and to hear of the implications for families of the shortage of homes, the very subject we are here to address.

We all know the personal security that comes from having a safe and decent home, and that is why I am pleased to be able to participate in today’s important debate. Getting more people on to the property ladder and improving social housing are key priorities for this Government, and I welcome the report of the Economic Affairs Committee, which makes a valuable contribution to this debate.

It is clear to us all that our housing shortage cannot be met by one housing sector alone. The private sector, local authorities and housing associations all have a valuable and very necessary part to play. Housing associations offer £6 of private investment for every £1 of public money and they provide flexibility in the way they use their existing resources and a guarantee that all profits are reinvested in homes and communities. The Government recognise the need to incentivise housing associations to build more homes and have allocated an additional £1.4 billion of funding, which will allow housing associations to build more homes of every tenure.

For decades we have not been building enough homes, and that has resulted in house prices growing faster than incomes and rising rents affecting people throughout the country. The availability of land for housing development is clearly a key factor in our housing crisis, and I therefore particularly welcome the proposals in the White Paper relating to the land release fund. As the success of the one public estate programme has already demonstrated, the release of surplus public land can provide a significant opportunity to boost housebuilding. I am pleased that the Government have committed to consultation on relaxing the requirement on public bodies to achieve best value on the sale of land. This could make a big difference, as the availability and affordability of land are some of the biggest constraints on increasing housebuilding.

The National Infrastructure Commission’s launch of the housing infrastructure fund at the Autumn Statement, as well as the connection it made between the supply of new homes and the infrastructure needed to support them, are welcome recognition of the link between housing and infrastructure. The Local Government Association has consistently argued that council planning departments need to be sufficiently resourced to fulfil their part in delivering more housing. Specifically, the LGA has highlighted the fact that councils have been forced to spend in excess of £450 million to cover the cost of planning applications over the past three years.

Currently, taxpayers are subsidising 30% of the estimated cost of processing all planning applications in England, because nationally set planning fees do not recover the full cost. The planning fee is usually a tiny proportion of the overall development costs and is not generally seen by either developers or property owners as a tax on growth. This is evidenced by the fact that a number of major developers are currently proactively involved in planning performance agreements with councils which see them voluntarily paying a higher fee in return for a guaranteed standard of service with transparent agreed timescales. I am delighted that the White Paper recognises this issue and is allowing councils to increase planning fees by 20% from July, if they commit to investing the additional fee income in their planning departments. I know that the LGA also welcomes the greater flexibilities in relation to the delivery of starter homes that are outlined in the White Paper.

It goes without saying that communities are most likely to support new development when it is accompanied by necessary infrastructure. We have already seen recognition of this with the introduction by the coalition Government of the new homes bonus to encourage councils to grant planning permissions for the building of new homes in return for additional revenue. Building on this, the introduction of the £2.3 billion housing infrastructure fund is to be strongly welcomed.

As a former council leader, I know that councils through their planning departments are playing their part in addressing the housing crisis, with nine out of 10 planning applications being approved. Despite this, research from the LGA shows that a record 475,647 homes have been given planning permission but are yet to be built. It is for this reason that I welcome proposals in the White Paper to allow councils to make greater use of compulsory purchase powers to unlock stalled development sites, and measures that will require starts within two years of planning permission being granted. I am, as your Lordships would expect, a strong supporter of local government. When faced with challenges, local government can be at its most creative, and today there are many examples of local authorities being creative and innovative with schemes that serve the needs of their communities. Some are very small-scale, but they show the flexibility of thinking and how councils can work within what appear to be constraints.

I give a small example. Ashford Borough Council, in recognising the need to assist older people, has developed a policy to allow exception sites to be used for specialist accommodation. The council made available land in its ownership on a long lease of 125 years for a nominal rent to Housing & Care 21. In July 2016, the doors were opened on 33 flats, 17 for affordable rent and 16 for shared ownership. That may be only small beer, but it shows that the council was prepared to use its own land in that creative way for what the community actually needed.

Supported housing is a vital part of the nation’s housing need. I welcome the Government’s decision to protect the level of funding for the supported housing sector. However, I am sure my noble friend the Minister is aware of the concern of the housing association movement: for it to continue developing new supported housing schemes, it needs much more certainty of funding.

Increasing the housing supply, getting people on to the property ladder and improving social housing are objectives that we can all surely support. These are the driving principles behind the report of the Economic Affairs Committee and the White Paper. I hope that through this debate we can work constructively with the Government to deliver more and better housing for the people of this country.