Future Homes Commission Report

Lord Whitty Excerpts

Tuesday 4th December 2012 Lords Chamber

[Lord Whitty]

My Lords, I thank the noble Baroness, Lady Whitaker, the RIBA and the Future Homes Commission for producing such a good report. I declare an interest as chair of Housing Voice, which was designed 15 months ago to raise housing up the political agenda. There is no doubt that we have succeeded in that with help from a lot of others—the whole list of reports that the noble Lord, Lord Best, outlined indicates that. Indeed, we have produced our own report which comes to roughly the same conclusions as everybody else’s if we are to tackle what is a chronic dysfunction in all sectors of the housing market, we need 250,000 or 300,000 homes brought to the market in one way or another, probably for the next 20 years.

That is a colossal problem and it requires some change in long-term strategy. The Government, as the noble Baroness, Lady Maddock, said, have taken some useful initiatives, as did the previous Government, but, frankly, in terms of the size of the problem, they are tinkering. They may be successful, but the long-term problem requires a more long-term solution. Others have emphasised the lead role of local authorities in this aspect. Although I share some of the scepticism of the noble Lord, Lord Greaves, about the effect of the Localism Act 2011, at least it is a start at putting local authorities in the driving seat on housing needs in their area, assessing and helping to meet them, using neighbourhood plans and other planning to ensure that adequate homes are built for the kind of population that lives or works in their areas. However, in order for local authorities to succeed, they and/or their partners in delivering those homes need long-term access to resources.

That is the central dilemma for any long-term strategy. Local authorities have restrictions on their borrowing powers if they are to invest either in their own stock or in partnership with private developers or housing associations. There are grave restrictions in the Treasury rules on local authority borrowing. Just today, the London councils have pointed out that the cap on borrowing against their stock is actually inhibiting the ability of London to build enough homes for the population.

Another source of resources which the report identifies is institutional funds, in particular, local government pension funds. The report suggests that 15% of these assets should be invested in providing funds for housing. I have just retired as chair of a local government pension scheme member fund and I think that 15% may be a bit ambitious in terms of the attitudes of the advisers, trustees and members of the funds. Nevertheless, significant funds could be raised not only from local authority funds, but, as the noble Baroness, Lady Maddock, said, from a wider range of pension funds.

We are in an austerity period and there are grave restrictions on public expenditure, but at the end of the day some of these problems, particularly in relation to social housing, will not be resolved unless there is an increase in public expenditure over the longer term in housing. It need not be of traditional form—it could be in partnership with all sorts of partners—but some form of expenditure is needed. There is a fundamental dilemma in government spending in housing. On present plans, although the Chancellor may change them shortly, roughly £100 billion will be spent on housing over the next five or six years. The problem with that is that £90 billion of that £100 billion is to be spent on housing benefit, not on building houses. It is almost the reverse situation from that of the Macmillan Government and other Governments in the 1950s and 1960s. It is a very painful process to switch subsidy away from individuals and welfare and back into providing housing, and affordable housing. But if we do not start on that process now, it will be not only the present generation of house seekers and new family formations that find themselves in dire distress, but future generations as well.

As my noble friend Lord Sawyer has just said, for many people their house, or home, is at the centre of their quality of life. If we are to resolve this issue over the longer term we have to find a way where government support, institutional investment and private investment is directed at providing more homes, and better quality homes, for our people. It is one of the biggest issues facing this Government; at present, they have not yet matched up to it. I hope that despite his occasional infelicities, Nick Boles is taking on this task; I assume that he is not being considered for transfer to the Foreign Office, since his diplomacy needs a little bit of attention—but at least he has the drive. I hope, therefore, that the Government will begin to shape up to that task and that all who are interested in housing help them so to do.