A flagship Government housing initiative has proved an expensive non-starter, according to the National Audit Office (NAO), with not a single home built despite millions spent on the programme.
Starter Homes are a legacy of David Cameron’s period as Prime Minister, first appearing as a commitment in the 2015 Conservative Party election manifesto.
The plan was to build 200,000 so-called Starter Homes aimed exclusively at first-time buyers under the age of 40, and sold at a 20% discount. In the November 2015 Spending Review, some £2.3 billion was provided to support the delivery of 60,000 such homes.
But as the NAO found, not a single home has ever been built, despite Government spending hundreds of millions of pounds on preparation and support for the scheme.
Furthermore, the relevant legislative provisions for Starter Homes in the Housing & Planning Act 2016 are not yet in force. As the NAO explains, the Ministry for Housing, Communities & Local Government (MHCLG) had expected to introduce the secondary legislation and planning guidance for Starter Homes this year.
It had not done so by the time the NAO released its report yesterday; of course, with Parliament closing for the coming General Election the same day, all of this remains very much a moot point. The NAO’s report had also noted that the Starter Homes programme no longer had any kind of budget associated with it.
Even so, a lot of money has been spent on Starter Homes already. The NAO report highlights:
- Between 2015-16 and 2017-18, MHCLG spent almost £174 million preparing sites originally intended for building Starter Homes. The ministry and its agencies financed preparations for Starter Homes through three main sources of funding: Starter Homes 2015 funding; the Starter Homes Local Authority Funding Programme (SHLAFP); and the Starter Homes Land Fund (SHLF)
- In 2015-16, Homes England spent £15.4 million of the Starter Homes 2015 funding preparing brownfield land. Although £26 million of funding had been made available by MHCLG, the full amount was not spent because Homes England did not identify enough sites within 2015-16, the year when the funding was available, and the unspent funding was returned to HM Treasury.
- Since August 2015, MHCLG has spent £6.45 million supporting local authorities through the SHLAFP. Homes England awarded 19 grants to 14 local authorities outside of London
- In 2016-17 and 2017-18, MHCLG spent £151 million under the SHLF, but the spending has not supported the building of Starter Homes. The ministry used the SHLF to acquire and remediate suitable land to then sell on to developers. It forecasts the spending will create 1,268 affordable homes and 3,907 market homes; however, without the necessary secondary legislation, the homes cannot be marketed as Starter Homes
Perhaps we shouldn’t be surprised by the NAO’s findings, what with the disarray that has engulfed the political sphere following the 2016 EU referendum, the subsequent 2017 General Election, and the protracted battles over Brexit – and now a fresh election on 12 December throwing even more uncertainty into the mix.
Given the imminent election, naturally Labour’s shadow housing secretary John Healey was quick to brand the Starter Homes programme a “total failure”.
“It’s clear you can’t trust the Tories to do what they promise,” he added. “Conservative ministers pledged in 2015 to build 200,000 cut-price homes for first-time buyers, but the National Audit Office confirms they haven’t built a single one, despite wasting four years and spending millions of pounds.”
The building industry isn’t best pleased either, with trade body the National Federation of Builders (NFB) saying the Government “had pulled the rug from under small builders”.
“We worked hard with the Government to make them understand how important this policy was to small builders and communities,” said Richard Beresford, the NFB’s chief executive. “They’ve not only pulled the rug from under small builders, including many hard-working NFB members, but also from under thousands of homebuyers who would have benefited from this policy.”