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Government too dependent on private developers to meet housing demand, says PAC

Words: Laura Edgar
Homelessness increases / iStock

The government remains dependent on the existing market and private developers to meets its target of delivering a million homes during this Parliament, despite acknowledging England’s housing market is broken, said the Public Accounts Committee (PAC).

In Housing: State of the Nation, the committee notes that the human costs of the housing crisis are emphasised by the “growing problem” of homelessness. The number of families living in temporary accommodation has risen from 50,000 in 2011-12 to 72,000 in 2015-16.

The housing white paper, published in February, notes that the housing market in England is broken, but the PAC thinks the government is still dependent on large private developers to meet its one million homes target.

If this target is realised, the PAC said the Department for Communities and Local Government (DCLG) also acknowledges that it will not meet the actual level of housing need, therefore “problems of affordability and homelessness are likely to persist for years to come”.

The committee recommends that, to aid evidence-based consideration of alternative policy options to accelerate housing, the DCLG should:

  • Review international evidence and report to Parliament on lessons to be learned from the housing policy and institutional landscape of other countries with higher rates of housebuilding than England, in particular focusing on innovative methods of accelerating construction and improving affordability; and
  • Write to the committee within six months with estimates of how many homes councils will be able to build up to 2020 under current financing arrangements, and with details on what other, more innovative measures councils can pursue to develop new housing.

The report notes that the government spends about £21 billion each year on housing benefit but doesn’t know what contribution this money makes to the supply of new homes. Therefore, the DCLG should work with the Department for Work and Pensions (DWP) and report to the PAC within a year, identifying metrics that can be used to establish the impact of housing benefit on construction of new homes.

The two departments should also examine the scope for this financing to be used more innovatively to increase housing supply and home ownership.

Housing: State of the Nation can be found here.

Image credit | iStock