A new Housing Secretary faces the same old housing crisis. By Andrew Howard
The promotion to Home Secretary of Sajid Javid in April as the first BAME and Muslim cabinet minister to occupy one of the great offices of state, was a headline-grabbing move for a Conservative government, still reeling from the fallout from the Windrush migration scandal.
Less fanfare accompanied the elevation of James Brokenshire to be Secretary of State for Housing, Communities and Local Government (MHCLG). A cautious operator, although by most reports a thoroughly likable and competent man, Brokenshire stood down in January, from his post as Secretary of State for Northern Ireland, to have treatment for lung cancer.
His return to Parliament duties just five weeks later and his fast-track return to the Cabinet after a further ten weeks, show both his personal courage and determination and the extent to which he is trusted by Theresa May as a safe and loyal pair of hands.
So, with no track record or expertise in the Department or policy areas he is now responsible for, can he have any real impact at all when faced with the huge challenges faced by Housing, Communities and Local Government?
Some commentators have been quick to criticise the lack of ministerial continuity at the department coupled with Brokenshire’s lack of previous policy experience with the department’s pressing issues. He comes to a Department at a time when housing – or the lack of it and the cost of it – is at the top of the Government’s domestic agenda and pressing need to deliver results. Sajid Javid was a radical. A political disrupter. Thatcherite and pro-business, he understood markets and he understood – from real personal experience – housing need. For those who think that the housing crisis requires radical solutions, he was the best hope for measures to shift policy towards the rental sector and encourage housebuilding with greater relaxation of planning laws, empowering councils to borrow to build and taking a fresh look at thorny issues such as the Green Belt. To that end, his consultation on the NPPF, was to many a disappointing missed opportunity, which didn’t grasp some of the key nettles such as reform of the Green Belt.
Brokenshire is no radical. He is as conventional as Javid was disruptive. Think of this forced change as comparable with switching the controversial Michael Gove for Nicky Morgan (never a household name even then) at the Education Department a few years ago. The good news is that he does have the support and ear of the PM and it may well be, that this quiet operator, is more effective at finding the right tone to unlock Treasury funds, than his more radical predecessor.
The truth is that whilst Theresa May has made tackling the housing crisis one of the central themes of her premiership, her new Secretary of State has precious little leverage to deliver the scale of what is really required.
The standout issues for Brokenshire have to be getting a grip of the Grenfell Tower tragedy and doing something to advance the planning and housing supply-side reforms promised by his predecessor.
First, Grenfell. Almost a year on, many of the families displaced by the fire are still not permanently rehoused and the Government has revealed that over 300 towers have been identified with the similar cladding to that used on Grenfell. Finding the cash to rehouse the displaced and fund safety repairs is a moral and political imperative. Sajid Javid promised a ‘fundamental’ review of social housing in the light of the Grenfell tragedy, his successor would do well to honour this commitment. The implications for the industry in terms of Building Regulations, product certification and regulation and the scrutiny of innovative construction methods, will be with us for years to come.
Secondly, housing supply. Implementing the Housing White Paper recommendations and in particular the consultation on the reforms to the NPPF will be key tests for Brokenshire. As will implementing recommendations of the Letwin Review, which is looking at the gap between the number of planning permissions being granted and the number of homes built. Will caution further dilute promised changes? Or will he quietly use his credit with Number 10, to deliver on reforms to boost housing supply?
Theresa May’s speech in March set out the issues. “For decades, we have failed to build enough of the right homes in the right places”. Calling out the market failure at the heart of the housing crisis, she called for “rewriting the rules on planning” and for developers to “step up to do their bit” to build-out permissions more quickly. Slamming the social injustice of housing unaffordability, when lower supply drives up prices, she denounced the “perverse incentive” of developers’ bonuses being on profits and share prices, rather than housing numbers.
The Government’s approach seeks to force the pace of house building and targets both developers and local councils. Developers face penalties for building out permissions too slowly or land banking and councils will be cajoled into reducing delays to granting permissions.
In truth – notwithstanding Sajid Javids’s rhetoric – the proposed NPPF changes are very minor and in respect of the Green Belt policies do not help. The Institute for Economic Affairs, which favours a free-market, genuinely radical view, says that the proposed reforms “tinker at the edges” and that the “broken housing market is down to a lack of supply resulting from restrictive planning laws that… prevent the necessary number of homes being built”.
Amidst all the endless talk of national crisis we should recognise that some progress is being made. Over 217,000 homes were built last year – a significant step up, though still a long way shy of the delivering the 2020 target of 300,000 homes per year. The Home Builders Federation (HBF) report released on 2nd May, showed that Planning Permission for 351,169 homes was granted in England in 2017 (the highest since 2006 when reporting started).
Still the HBF notes, that to build more homes, more land needs to come through the planning system more quickly, and for a broader range of sites. Revisions to the NPPF, need to speed up the time it takes to get from an outline permission, to an implementable one. Focus is also needed on why permissions are increasingly on larger sites that typically require greater upfront capital and more extensive infrastructure, slowing build out rates, and making it harder for small builders to compete for sites.
So, what else can the new Secretary of State do? Force councils to allocate the S106 monies accrued from developers to affordable housing? Badger Government Departments, to speed up the release of publicly owned land? Reverse funding cuts and rebuild capacity in council planning departments?
Perhaps above all, he could use his close relationship with the PM to make the case for a rethink on the Government’s approach to Stamp Duty, where the punishing costs to moving home are having such a negative effect on the housing market. Now that would be radical.
Andrew Howard is Managing Director at BECG, a sector-specialist, multi-disciplinary communications consultancy for the Built Environment sectors. Clients from all aspects of the Built Environment trust BECG as their expert and effective communications partner to help deliver their business objectives and achieve success. BECG is the largest specialist Built Environment communications agency in the UK with 90 employees and operates across a UK network of nine offices.
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