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The Budget is an opportunity to restart the engine on social housing funding

Comment09 Jan 2020Sarah Williams

A confirmed Budget date alongside an anticipated shake-up in government could see some of the sector’s funding questions answered – but providers also stand to gain from a creative approach to capital already near at hand, writes Sarah Williams

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Sarah Williams
Sarah Williams

Sarah Williams is editor of Social Housing

Picture: Getty
Picture: Getty
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Equal to the task: as funding pressures increase, housing providers could benefit from a creative approach to capital already near at hand, writes @SWjourno #ukhousing #socialhousingfinance
The Budget is an opportunity to restart the engine on social housing funding, writes @SWjourno #ukhousing #socialhousingfinance

New year, new start – so the popular saying goes. Whatever your leanings where politics are concerned, rarely have those in Westminster had such an opportunity to deliver on that promise.

 

A December election result that delivered a firm majority for the Conservatives means that Brexit may actually happen by the current deadline of 31 January. Meanwhile, the search for a new Labour leader is under way.

 

The announcement this week from chancellor Sajid Javid that his Budget will be made on 11 March brings with it the expectation of departments and organisations left guessing last year when the Spending Review was supplanted by a short one-year Spending Round.

 

The March Budget represents an opportunity to set the wheels turning again on long-neglected priorities. In housing, that means answering resounding requests for support, as the cross-subsidy model continues to be questioned in light of growing financial pressures around safety, quality and supply.

 

Promising “a new chapter for the economy”, Mr Javid’s Budget announcement also comes amid reports of Boris Johnson’s burgeoning plans to “shake up the government machine”.

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Changes to departments and the wider process are expected to reflect new priorities such as the green agenda – as well as a desire to reshape the economy around regional need in response to voters in traditional Labour heartlands who, in the prime minister’s words, “lent” him their vote.

 

For Mr Javid, that means a Budget that will “level up and spread opportunity”.

 

This overhaul could have wide implications for the housing sector.

 

According to Homes for the North, currently only four of 72 Northern councils are able to access 80 per cent of funding set aside through five targeted government funding programmes designed to stimulate housing growth.

 

This means that just 10 per cent of this funding may be allocated to the North at present, representing a “clear mismatch” when contrasted with measures of deprivation, argues the organisation’s chair Carol Matthews, in a recent Social Housing comment piece.

Rebalancing the economy will likely require reviewing the Treasury Green Book – the government analysis used to evaluate cost benefits.

 

For housing, making a clear case to the right people at the Treasury is clearly part of the solution, and former government insiders at our recent annual conference advised the sector to take a joined-up and “cross-cutting approach” if they want to influence key decision-makers.

 

But, with reports of more and more investors eyeing affordable housing each week, there are opportunities too for the sector to collaborate to find the right way to deploy that capital as equity, as part of the funding mix.

 

Creating structures that truly mitigate risks, remove pressure from balance sheets and keep those with long-term knowledge and commitment to tenants in the driving seat is a challenge the sector is starting to take on.

 

With the added scrutiny that private sector involvement rightly attracts, housing providers can’t afford to get this wrong – but get it right, and the funding gap could just start to narrow.

 

Sarah Williams, deputy editor, Social Housing

FinanceFunderHousing Association/RPRegulation and Governance
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