Kent Housing Group 3 rd February 2011 The Implications of the Spending Review and Emerging Policy for Housing Chris Cobbold Director of Housing Practice Group

The Policy Deluge The Abolition of the RSSs New Homes Bonus Local Standards Framework The Spending Review Local Growth

The Policy Deluge Local Decisions – Social Housing LA Financial Settlement Localism Bill Self financing for Council Housing...etc

The RSS Boomerang July – the RSSs revoked 160,000 homes ditched 300,000 by end of 2011 Revocation ‘unlawful’ Localism Bill published Inter-regnum

Planning for Housing without the RSS Local Plans have to be ‘sound’ Sub-Regional Market analysis Key Elements of Analysis  Economic Drivers  Demographic Drivers  Housing Need  Land Supply – Capacity Where are you in the LDF process?

The New Homes Bonus Average Council Tax Band D = c£1,440 Paid a year in arrears......for 6 years Plus £350 for each affordable home New homes and empties

The New Homes Bonus – what is it worth? 250 homes pa £1,400 pa £350k in Grows by £350k pa By receive £2.1 m

Issues Managing community expectation Expenditure outside CSR Period Impact of a change of government? Borrow against anticipated income? Potential to forward fund infrastructure How much additionality?

The Local Standards Framework Building regulations and standards Simplification and standardisation A menu approach Housebuilders and LAs to work together An agreed Local Standards Framework National Planning Policy Framework 2012

The Spending Review – the NAHP CSR CSR No. of Years34 Funding in £bn Funding pa in £bn Dwellings Target153,176up to 150,000 Public cost per dwelling £59,000£30,000 Existing commitments on NAHP - £2.4 bn

Affordable Rent from 2011 Up to 80% of market rents Shorter term tenancies New development and empties Re-lets can be changed to AR New ‘Flexible Tenancy’ The Affordable Rent Programme

Opportunities and Challenges Stretches NAHP resource Enhanced RP borrowing Impact on scheme viability Social rent Impact on HB budget Different providers

Other Features of the Spending Review £2 bn for Decent Homes Reform of the HRA  Borrow against rental streams?  For repairs, improvements, new building  Link to prudential borrowing?  New housing on LA land £100 m for Empty Homes  3000 homes  £33k per home

Other Features of the Spending Review DFGs  £720 m  Not ring fenced Preventing Homelessness - £357 m £200 m for continuation of Mortgage Rescue Scheme £6.5bn for Supporting People

Local Growth: Realising Every Place’s Potential Tax Increment Finance  Mixed use regeneration Local Enterprise Partnerships  Role in strategic planning  ‘Transport, housing and planning’  ‘strategic housing delivery.... ...pooling, aligning funding streams’! Business Increase Bonus Business Rate Retention

Reform of Planning Presumption in favour of sustainable development Communities ‘centre stage’ in planning Neighbourhood Plans Right to Build Streamlined Local Development Plans Streamlined National Planning Framework

Regional Growth Fund £1.4 bn over 4 years Objectives  Stimulate enterprise and private sector jobs  Focus on areas over dependent on public sector jobs Includes infrastructure investment ‘to improve housing supply Round 1 bids emphasis on jobs

Local Decisions: A fairer future for Social Housing New tenure for Affordable Rent  Fixed period  Continuation subject to review Broader tenancy options for LAs  Existing secure tenants unaffected  Flexible Tenancy option for LA relets  Time limited, minimum 2 years LAs to prepare Tenancy Strategy New Tenancy Standard

Local Decisions: A fairer future for Social Housing Management of waiting lists Foster mobility of social tenants House people in the PRS Regulation of social housing Reform of the HRA

Self Financing for Council Housing HRAs to be run as social businesses Move to self financing by April 2012 – step 1 – value the business – step 2 – estimate current housing debt – step 3a – surplus value paid to the government – step 3b – surplus debt paid off by government Rental growth formula specified Controls on HRA borrowing Freedoms to dispose of assets But 75% of RTB receipts to HMT

To summarise: Affordable Housing Less money More flexibility Greater scope for innovation New forms of provider Increased local decision making Greater diversity of provision

To summarise: Planning Enhanced uncertainty Push LDFs forward Establish new evidence base Work sub-regionally Unlikely to deliver more housing

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Page 23 Housing Starts fall dramatically – completions will continue the downward track Source: CLG

Page 24 Mortgage Availability and Cost – significant constraints continue on mortgage lending Volume of Mortgage Approvals August 2001 – Aug 2010 Value of Mortgage Approvals August 2001 – Aug2010

Page 25 Current Position: The market remains subdued by historic standards Index of Sales Volumes 4 Quarter moving average: Prime London defined as Kensington & Chelsea, Westminster and Camden Boroughs

Page 26 Conclusion Local Authorities and their partners are going to have to work harder still to get the homes their communities need The Kent ForumHousing Strategy identifies what needs to be done

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