The Ministry of Housing, Communities and Local Government continues its efforts to tackle the UK’s housing crisis. On Tuesday, 7th January 2025, key officials, notably Rt Hon Angela Rayner MP, Secretary of State and Sarah Healey CB CVO, Permanent Secretary, shared updates on several key areas, including funding for local councils, reforms to the planning system, progress towards achieving the 1.5 million homes target, the role of developers and labourers and the future of social and affordable housing. Below is a breakdown of the key points discussed.
Funding for Local Councils
Although local councils have welcomed the Government’s decision to provide a one-year funding settlement for the upcoming financial year, Labour’s manifesto had pledged multi-year funding settlements. Mr Lee Dillon queried why this had not been implemented yet, with Rayner reassuring the committee that the government are looking to move towards multi-year funding settlements "as soon as possible”, attributing time constraints between budget setting and implementation as the primary reason for the delay.
The Government also announced an additional £515 million for local authorities, including the mayoral combined authorities and fire rescue services. Rayner stated that this funding is intended to help local governments manage the changes to employer national insurance contributions introduced in the latest Budget.
Achieving the 1.5 Million Homes Target
Rayner and the Government remain committed to building 1.5 million homes, a level of house building not seen since post-war Britain in the 1950s. However, Chris Curtis was quick to doubt Labour’s ability to reach this target given the completion of only 221,000 homes in the last financial year. For context, 370,408 homes are needed to be built annually to achieve their 1.5 million target. Rayner acknowledged the challenge, stating that even if the target is reached, it would only be a small step towards addressing the larger housing needs in the country, as 1.3 million people alone are currently on council waiting lists.
The Government has been resistant to setting annual housing targets, with Rayner recognising that this is because it is not feasible to meet them consistently, particularly in the first few years of governance. Instead, Labour plan to spend the early years of Parliament streamlining the planning process, with the hopes that their reforms will allow increased development towards the second half of the parliamentary term.
Planning Reforms
In order to achieve the Government’s ambitious target of 1.5 million homes over the next Parliament, Labour has committed to streamlining the planning system. Rayner spoke about a number of measures that the Government has already undertaken to achieve this goal, specifically:
National Planning Policy Framework (NPPF) Consultation and Revisions: changes to the NPPF include the introduction of a new mandatory housing target for all local authorities.
Investing in Planners: the Government has invested in 300 new planning officers to help local authorities increase capacity, in the hopes that this enables a faster approval process.
Affordable Homes Programme: an additional £500 million has been allocated to the affordable homes programme, with ongoing discussions with metro mayors and local authorities to explore how Homes England can further support this programme.
Unlocking Brownfield Sites: the introduction of a brownfield passport aims to address the challenges that have stalled development on previously identified sites.
New Homes Accelerator: a dedicated team will work on unblocking sites that are critical to meeting the housing target.
New Towns Programme: a taskforce will report later this year on the potential for new towns and the opportunities they present. These new towns are not included in the 1.5 million target but could provide additional capacity.
Planning and Infrastructure Bill: set to be introduced around March, the bill is expected to implement further reforms to enable faster planning and infrastructure development.
Developers and Labourers
Rayner emphasised the Government’s commitment to reducing the time it takes to secure planning permission, which currently stands at up to seven years for new housing projects. To achieve this, the Government plans to adopt a "carrot and stick" approach. The carrot involves making the planning process clearer and faster, while the stick will hold developers accountable, ensuring that they meet their obligations under Section 106 agreements.
Alongside this, Rayner recognised the importance of small and medium developers and pledged to support them to enter the field of planning. When queried by Mr. Lee Dillon on the lack of workforce to build the 1.5 million houses, Rayner insisted that there will be additional funding for construction hubs and that the Government is working with the Department for Education and the employment Department to deliver employment in the construction sector through job centres and the Department for Work and Pensions.
Social and Affordable Housing
At the end of July 2024, Labour consulted in the NPPF on an approach to social housing which proposed that 50% of housing on grey-belt land should be designated as affordable and social housing. However, following concerns over viability, the target has been revised to the local authorities’ existing affordable housing targets, plus an additional 15%.
Despite probing from the committee for a definitive target for social housing, Rayner remained firm, stating that “the minimum level is as I have said: the biggest wave of social and council housing for a generation”, asserting that providing an exact, definitive figure would be ill advised.
What is Next?
Going forward, we can expect the Government to continue its efforts to meet the housing target through a combination of streamlined planning processes and significant investment in housing infrastructure. The upcoming Planning and Infrastructure Bill, set to be introduced in March, will be key in implementing further reforms to accelerate planning and development.
In addition to this, the New Towns Programme presents a significant opportunity for housing expansion. Rayner indicated that a taskforce is expected to report later this year on the potential for new towns and the opportunities they present. Notably, these new towns are not currently included in the 1.5 million housing target, meaning they could contribute additional capacity to the overall housing supply.
With these new policies and programmes on the horizon, we can expect continued progress toward addressing the housing crisis. Stay tuned for updates on the Planning and Infrastructure Bill and the New Towns Programme
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Contact us at Bluestone Planning by calling +44 1235 766825 or emailing admin@bluestoneplanning.co.uk.
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