Autumn Statement 2023

Baroness Thornhill Excerpts

Wednesday 29th November 2023 Lords Chamber

[Baroness Thornhill (LD)]

My Lords, amid such a body of economic expertise and experience, I intend to focus simply on some of the main headline-grabbing announcements on housing in the Autumn Statement. Interestingly, I will echo some of the thread of criticism made by many noble Lords.

Despite the rise in universal credit, pensions and the national living wage, the welcome big announcement, for those of us involved in housing, was the unfreezing of the local housing allowance to restore it to the 30th percentile. With homelessness at a record high, rising rents and a cost of living crisis, unfreezing housing benefits to cover the bottom third of local rents is an essential lifeline to keep people in their homes. But—and there has to be a but—it is still not restored to the 50th percentile, which was the benchmark in 2010, and, regrettably, it will not come into play until next April. It is nearly December. Surely the Government realise that this will leave many families facing an uncertain cold winter, with many facing the threat of eviction and subsequent homelessness, or spending their Christmas in one-room temporary accommodation—a grim situation for the most vulnerable. Will the Government reconsider and bring this decision forward?

The additional sting in the tail is that this rise is for one year only and will be frozen again from 2025, when the whole depressing cycle will start again. These delayed starts and later freezes are no way to run either a benefits or a housing system. Meanwhile, the increases in the local housing allowance, and benefits in general, will also bring more people within the scope of the benefits cap. Although that was increased last year, it has been frozen this year. Do we see a pattern? It is still way below what it was 10 years ago.

We also see in this Autumn Statement clever examples of smoke and mirrors—or, as the previous speaker said, sleights of hand. Take the amounts of money given to the extension of the affordable homes guarantee scheme: a £3 billion extension—good news. But these are loans to housing associations to allow them to build more affordable homes for rent. All good—but a loan compensates only partially for the lack of enough real new money being put into a system already creaking under the costs of decarbonisation, building safety, spiralling material and labour costs, and all the other factors significantly squeezing associations’ budgets. As they are the main providers of affordable and social homes, it is important that we recognise the precarious financial situation of some of the sector.

The social housing regulator has recently announced the downgrading of “a couple of dozen” associations over their financial viability, with the lower V2 assessment becoming “the new normal”. That reflects the economic reality for the sector. But the consequence of this harsh reality is that many have had to reduce their building and development aspirations, or put them on hold completely. This is a very poor state of affairs when the need for social homes has never been greater.

The Minister will rightly say that there is some new money. But take the third round of the local authority housing fund. It is hoped that £450 million will provide 2,400 new homes. Interestingly, the criteria for this fund have been tweaked to include use for temporary accommodation and housing Afghan refugees. Both those groups need secure permanent accommodation, but there are already more than 100,000 families in temporary accommodation, and about 21,000 Afghans have been resettled under different schemes and a further 1,054 entered the UK in the first three months of this year, requiring homes. It must be recognised that this has put real constraints on council budgets. Put quite bluntly, in areas of high-cost housing, properties are simply not there at an affordable price. Councils are now in the invidious position of competing with ordinary citizens to find homes to rent for their groups, putting more pressure on an already overheated market, with soaring rental prices.

Add to this the increasing waiting lists for social housing and, according to the most recent English Housing Survey, some 750,000 families living in overcrowded conditions—sleeping in hallways and living rooms, and sharing beds with parents or siblings. It is not an exaggeration to say that this money, however welcome, is a drop in the ocean.

There were also interesting headline announcements on planning. One was that there would be a new premium planning incentive, whereby local planning authorities would be able to recover the costs of major business applications, in return for guaranteed faster timelines. That will undoubtedly help cash-strapped councils, and hopefully speed up applications—but, given that only 15% of planning applications currently come from such businesses, it will be helpful but merely a plaster on the wound.

The fear is that council officers will concentrate on those cash-earning applications, while the vast majority of applications will be placed in the pile labelled, “To be dealt with as and when we can”. Given the serious recruitment issues that the sector faces, this will be a tough challenge. The Autumn Statement promises a pot of money for additional planning officers, but there are simply not enough trained planning officers in the system to make a difference in the short term. The bodies are simply not out there, and many go straight to work for the housebuilders, because—guess what—they can get significantly more money by doing so. Importantly, as with all the areas in development construction, the industry skills shortage is acute. This is probably the most significant barrier to speeding up planning applications and improving build-out rates. We need a longer-term training and recruitment strategy across all the skills within the construction industry and its supply chains. Never has the need been more urgent.