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CSR 2007: the implications for Local Authority Housing

The Chancellor’s October pre-budget report and comprehensive spending review included the announcement of increased spending on housing from £8.8bn in 2007-08 to £10bn in 2010, a new housing and planning delivery grant worth £500m over the three years of the CSR period and a new Public Service Agreement (PSA) aimed at increasing long-term housing supply and affordability.

Many of the measures put forward by the Chancellor focus on steps to extend private ownership of houses extend private ownership of housing. However the Chancellor did also state that the government “will continue its long-term commitments to increase the quality and availability of social housing” and he announced £6.5bn over the next three years for the delivery of 45,000 new units of social housing the year by 2010-11.

There were some signs that the Government, under Gordon Brown’s leadership, may be giving more impetus to enhancing the role for local authorities within housing. The CLG is to “support Local Authorities in the role of leading on regeneration and renewal across government and setting a clear tasking framework for the new Homes and Communities Agency”.

Turning specifically to Decent Homes, the Chancellor said that the Government will ensure all have access to decent housing, through:

• reducing the number of households in temporary accommodation by 50% by 2010-11, compared with the end of 2004;
• the Decent Homes programme, which by 2010-11 will have reduced the number of non-decent social rented homes by a further 500,000;
• the Supporting People programme, with continuing investment and a reformed allocation formula to better match need.

On homelessness, the Chancellor said that Government will be taking “further steps” to prevent homelessness, aiming to reduce the number of households living in temporary accommodation by 50 per cent by 2010-11 and increasing the number of people that move into settled accommodation. This aim will be embodied in a new PSA to increase the proportion of socially excluded adults in settled accommodation and employment, education or training.

Overall, less detail was set out on social housing in the report than for other services such as health and education. The £6.5bn for new social housing needs to be set in the context of the efficiency reforms also announced. These are to generate annual net cash-releasing savings for the Department of Communities and Local Government as a whole of over £880 million by 2010-11. The reforms will include:

• savings estimated at over £730 million from new affordable housing by 2010-11, achieved by utilising Housing Association capacity to allow for more borrowing to finance affordable housing, and the Housing Corporation refining its investment programme;
• achieving a smaller, more strategic central department with delivery functions devolved to the new Homes and Communities Agency and a more streamlined Government Office network to generate savings of £43 million by 2010-11.

Local authorities will need to adopt new strategies of efficiency and value for money if there are to meet their share of these savings and the momentum of improvement.

Gershon: Opening gambits
The options available and the issues local authorities can consider when looking to make efficiency savings in their housing services. Click here to download an article by Lesley Lodge featured in Property People.

On the money
Choices for local authorities to make following the government's recent "efficiency technical note". Click here to read an article by Lesley Lodge in Housing Today.

Prudential borrowing might be easier than you think
The option for local authorities to borrow to spend on housing standards is already available. Click here to read an article by Lesley Lodge in Housing Today.