Housing Strategy

Lord Best Excerpts

Wednesday 24th March 2021 Grand Committee

[Lord Best (CB) [V]]

My Lords, I declare my relevant interests as in the register, including as chair of the Affordable Housing Commission and as a Church Commissioner for the Church of England. I congratulate the most reverend Primate the Archbishop of Canterbury on establishing this housing commission and thank him for his inspiring presentation of its findings today, and I thank its chair, Charlie Arbuthnot, and the commissioners, for bringing together an excellent analysis of this country’s severe housing problems and their potential solutions. My comments are in two parts: first, a ringing endorsement of the commission’s main conclusions, and then a commentary on the specific recommendations to the Church of England on the use of its land assets.

I greatly welcome the commission’s housing policy recommendations. Its core conclusion is that

“the primary issue with the housing sector is not just a lack of housing”—

the lack of housing to which the noble Lord, Lord Lilley, rightly refers—

“but instead a lack of truly affordable housing, particularly for those on low incomes.”

This chimes with the theme of the Affordable Housing Commission, organised by the Smith Institute and funded by the Nationwide Foundation, which reported last year. We showed that, in large parts of the country, even if a landlord is willing to offer you a place, the rent is likely to absorb so much of your income—40% or even 50%—that you will end up in poverty, in debt, in arrears or, at worst, homeless.

I cite as an example the official statistics for poverty from Brent Council’s Poverty Commission, which I had the privilege to chair last year: before housing costs, 17% of households and 22% of children in the borough were classified as living in poverty; after housing costs were taken into account the figure rose to 32% of households and 43% of children. So the housing costs doubled the numbers living in poverty, to say nothing of so many being in the overcrowded, insecure and unhealthy conditions that have been shown up by the disproportionate impact of the pandemic on these communities.

Our Affordable Housing Commission noted that so many more households are struggling with housing costs because of the switch to the private rented sector, with its market rents, which has doubled in size in less than 20 years, to 20% of the nation’s housing, while the social housing sector—housing association and council housing—with its much more affordable rents, has halved to just 17% of our homes. The solution is for the Government to support councils and housing associations to increase their output of so-called social rented housing to around a third of the Government’s target of 300,000 new homes per annum.

I turn to the special ingredient in the commission’s recommendations which relates to the Church of England itself in addressing the housing crisis. The report highlights the wonderful work done at the local level by members of faith groups in social action that helps homeless people and engages with housing support of different kinds. The commission sees a special opportunity for practical assistance to extend this commitment through the use of land and buildings in the Church of England’s ownership. This is enormously important because the price and availability of land is perhaps the greatest stumbling block to producing the affordable housing we need. However, this is by no means a straightforward matter, as my three years as a Church Commissioner, under the skilful and sensitive chairmanship of the right reverend Prelate the Bishop of Manchester, have taught me.

The first obstacle to attempts to dispose of a piece of church land or buildings on favourable terms—for example, to a community land trust or a voluntary body working for the homeless—is the confusing legal obligation on any charity to reject all but

“the best terms reasonably obtainable”.

In reality, the definition of “best value” should not be such a problem. Indeed, the price a housing association or other voluntary body can pay will often not be appreciably lower than that obtainable from a speculative development and other benefits will more than compensate for any difference—benefits not just to society but in the wider work of the Church itself, sometimes even with the provision of a nomination right to a rented flat for a church worker, curate or a retired vicar. I hope that ongoing discussions with the Charity Commission will resolve this long-standing valuation issue. However, it is possible that your Lordships’ help will be needed for legislative change to remove this irritating obstacle.

Then there is the anxiety that disposing of church land or buildings at anything less than full open market price will diminish resources for the Church’s core ministry. Land is a highly significant part of the Church’s historic assets. In addition to the commissioners’ land holdings of over 90,000 acres, there are hundreds more sites and buildings with development potential within the Church’s 41 dioceses, with initiatives in Gloucester and Newham, for example, already showing the way.

The Church Commissioners have been highly successful in promoting ethical investment for their stocks and shares, most prominently in exerting pressure on oil companies to decarbonise and meet sustainability goals. This sets the precedent for the commissioners to be a pace setter also in respect of the Church’s investments in land. The commission calls for generous, “sacrificial” action but I see a number of good reasons why ensuring that land assets serve a social purpose need not be in conflict with the need to achieve proper returns from this source.

First, it is the obtaining of planning consent that makes a development possible and unlocks its hidden value. This requires the backing of the local planning authority. There is widespread disenchantment with the volume housebuilders because, despite making substantial profits, so often they have demonstrated poor quality, poor design, lack of space and community facilities, leasehold scams, unjustified bonuses and, prominently, an antipathy to including affordable housing in their developments. Local authorities are likely to be far keener to deal with Church bodies that exercise responsible stewardship in the use of their land assets. Similarly, the locals who protest—often with much justification—at low-quality developments with no green spaces or community components, and with few, if any, homes affordable to local people, can be brought on side when a responsible stance is taken for Church-owned sites.

If the Church nationally and at the diocesan level has the reputation of insisting on high standards and achieving public good, those vital planning consents can and should be more easily secured. I am delighted that the Church Commissioners have signed up to adopting the good behaviour of the 2020 stewardship code when selling land. This is a step in the right direction and translating this into specific outcomes, with a stewardship kitemark, is the important next move.

Secondly, doing the right thing in utilising land holdings can also be a way of improving the return from this asset for years to come. By following the example of a growing number of other major landowners—including the Duchy of Cornwall with its successful Poundbury urban extension and its new scheme at Nansledan—and being a patient investor, long-term gains can be obtained. Simply selling to one of the oligopoly of housebuilders only enriches those companies. Instead, retaining land ownership and organising high-quality, community-enhancing developments, often in partnership with smaller building firms and housing associations, can keep the development profits in the Church’s hands.

It is good to note that investigations are now being undertaken by the Church Commissioners, with top-level property experts, to explore these opportunities. I commend the Citizens UK initiative, with which the Church of England is closely associated, alongside the Methodist Church and others, for a partnership with the Government that offers land release for social housing in return for funding to cover all the initial feasibility work. The Secretary of State, Robert Jenrick, has agreed to discuss this proposition further and I hope that the Minister will also engage.

In these ways, I am hopeful that, without weakening its financial position, the Church of England, and perhaps other denominations if they see fit, will maximise its direct contribution to easing the nation’s housing shortages. By encouraging responsible action by other landowners, from Oxbridge colleges to the Ministry of Defence to academy trusts and charitable foundations, it can magnify its influence for good, just as it has done so well with its ethical equity investment policies.

I conclude by reiterating my thanks to the most reverend Primate and I hugely welcome the appointment of the new bishop for housing, Bishop Guli Francis-Dehqani, who can take forward the Church’s renewal of its historic engagement with the housing scene. I wish her every success in helping all of us to up our game in tackling this most fundamental of our society’s problems.