Budget 2020: Sunak scrapes together a down payment on Johnson’s debt to the North

The new Chancellor Rishi Sunak’s first Budget was heavy on mitigating the coronavirus, less so in alleviating the chronic housing crisis, but there was a sigh of relief for high-rise residents stuck in unsafe buildings

By Mark Cantrell 

WITH the coronavirus breathing down own necks, it may seem churlish to decry a lack of support for social housing in today’s Budget, but any pandemic will pass while the housing crisis appears to have settled in for life.

That’s not to decry the seriousness of the situation, either in terms of Covid-19’s threat to human health, or to the potential impact it is likely to have on the economy. Few will take issue with the Chancellor of the Exchequer’s efforts to mitigate the impact on businesses and employees, among others.

Still, coronavirus is temporary, as Rishi Sunak MP himself acknowledged in his speech: “There is likely to be a temporary disruption to our economy,” he said. “On the supply side, up to a fifth of the working age population could need to be off work at any one time. And business supply chains are being disrupted around the globe.

“This combination of people being unable to work and businesses being unable to access goods will mean that for a period our productive capacity will shrink. There will also be an impact on the demand side of the economy, through a reduction in consumer spending. The combination of those effects will have a significant impact on the UK economy.

“But it will be temporary. People will return to work. Supply chains will return to normal. Life will return to normal.”

Therein lies the problem: these days the chronic housing crisis stands as a constituent part of normality. Indeed, with rents (for instance) absorbing so much of people’s incomes, the cost of housing has its own subduing effects on the wider economy. Housing has become its own virus.

But, again, it seems churlish to bemoan today’s Budget, given it was a rare performance where housing was granted significant largesse by the Chancellor. It has been all-too common that housing has played poor relation, where it has gained a mention at all.

Sunak pledged £12.2 billion to fund new housing. This takes the form of a further £9.5 billion to extend the Shared Ownership & Affordable Homes Programme (SOAHP) to create the total from 2020/21 to support the delivery of “affordable” homes in England.

The problem is, that word ‘affordable’ has come to mean many things – often the exact opposite for those most in need of genuinely affordable housing. In 2018, the programme was amended to add social housing to the eligible tenures, but even so it remains to be seen to what extent social housing gets a much-needed boost courtesy of today’s announcement.

The Chancellor also pledged £400 million for mayoral combined authorities and local areas to establish housing on brownfield sites. The Budget also confirms allocations from the Housing Infrastructure Fund totalling £1.1 billion for nine areas, including Manchester, South Sunderland and South Lancaster.

Nevertheless, more money for “affordable” (or not) homes went down well with the National Housing Federation (NHF), as did some of the other elements, such as on building safety and homelessness, but the campaign organisation Generation Rent was rather less enamoured by the SOAHP announcement, as it made clear in a Tweet:

 

 

 

Kate Henderson, the NHF’s chief executive, said: “Today’s budget includes positive announcements for social housing – it delivers more certainty and new investment into housing for people most in need. These are all things housing associations have been calling for.

“We welcome the Government’s commitment to a £12 billion five-year Affordable Housing Programme, the main funding pot for affordable housing. It will help housing associations build much needed homes across the country. We look forward to working with government to shape the details, ensuring this money delivers homes for everyone.

“In addition, there’s new money for support for rough sleepers – it’s good to see the Government taking action on their manifesto commitment to tackle homelessness.

“It’s also positive the Government are introducing a £1 billion Building Safety Fund to remove all types of combustible cladding from high-rises. This will help ensure residents’ homes are made safe as quickly as possible.”

Ali Akbor OBE, chief executive of Leeds-based housing association Unity Homes & Enterprise, offered a sceptical, if welcoming, note to the Budget.

“It is always positive when extra money is promised to enable more affordable homes to be built,” he said in a statement. “However, whilst the Government’s commitment to increasing home ownership is well-known, we must never forget the needs of those who do not have the resources to buy their own properties and probably never will have.

“The country remains gripped by a housing crisis which the familiar rhetoric of successive Prime Ministers, Chancellors and Housing Secretaries has failed to solve. The housing association sector is desperately keen to play our part in delivering the many thousands of new homes for social rent that families urgently need.

“If the Government is serious about tackling the national housing crisis, it is now time to ‘get it done.’”

On homelessness, the Chancellor announced £643 million for accommodation and support services to help get rough sleepers off the street, including accommodation for 6,000 people.

The government is also introducing additional exemptions from the Shared Accommodation Rate (SAR) for Universal Credit and Housing Benefit claimants to protect those at risk of homelessness. According to the Treasury, this will enable rough sleepers aged 16-24, care leavers up to the age of 25, and victims of domestic abuse and human trafficking to live on their own, supporting their recovery from homelessness.

In its response, the Chartered Institute of Housing’s chief executive, Gavin Smart said there were some “important measures” to tackle the housing crisis, but he reiterated the need for the Government to invest in social rent homes.

“We are pleased that the Chancellor agrees with us that to deal with the crisis housing needs long-term attention and investment from government,” he added. “A £12.2 billion multi-year extension to the affordable homes programme will give some certainty – we hope this will include significant funding for homes at social rents, so that we build the truly affordable homes we so badly need.”

Smart also welcomed the £1 billion funding to tackle the cladding scandal, but warned that the true cost of making homes safe was likely going to be far higher.

“[T]the scale of investment required is likely to run to at least 10 times that amount. It is also important that we ensure that affected buildings below that height and leaseholders also receive the funding needed to make those homes safe,” he added.

“The commitment of £643 million funding to provide 6,000 homes for rough sleepers is a positive step. To support this commitment the gap between local housing allowance rates and the lowest 30% of private rented homes locally needs to be closed, if we are to successfully end homelessness once and for all.

“With a comprehensive spending review still to come, we will continue to urge Government to invest in the social rented homes we need so badly and to ensure that people on low incomes have the help with housing costs they need.”

When it comes to unsafe cladding, the Chancellor’s pledge of £1 billion to fund its removal certainly brought a sigh of relief from resident organisations, but there was no illusions that this would be a quick process; nor was the determination to push ministers for a resolution to their woes in any way diminished.

As the organisation Manchester Cladiators said in a statement: “Hundreds of thousands of residents, including thousands in Greater Manchester, with unsafe cladding and other fire safety issues had been anxiously waiting to hear if the new Chancellor would rescue them from their nightmare.

“The announcement today of a £1 billion Building Safety Fund in the Budget is a hugely positive step in response to concerted efforts by affected residents to get their voices heard…

“However, our experience of the Government’s £200 million ACM Fund, announced in May 2019, also shows that it will be many months before funding is committed and many more months before works are completed and all residents’ homes made safe  – including those in buildings under 18m.

“Today is a good day but we will continue to pressure Government until every single property is safe.”

The Mayor of Greater Manchester, Andy Burnham, wasn’t overall impressed by Sunak’s Budget, saying that when it comes to ‘levelling up’ the North it was “only a start”.

“Ministers have made a lot of promises to people here over recent months but what has been announced today does not live up to the rhetoric,” he added. “The Government will need to up its game in the Spending Review later this year if, as the Chancellor might say, they are really going to get the Northern Powerhouse done.

“One of the most welcome announcements was the Chancellor signalling the end of the cladding nightmare for thousands of residents across the country. But the devil will be in the detail. By limiting the funding to buildings over 18 metres, he is excluding multi-story buildings like the Cube in Bolton which caught fire last year. As welcome as this announcement is, the Chancellor may well need to go further so all residents can sleep safe in their beds.

“The Prime Minister is fond of saying, rightly, that the people of the North lent him their votes. He and his Government will need to do much more in the Autumn than today’s modest measures if he is to repay those loans.”

NH

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