Estimated reading time: 4 Minutes
05 July 2019
The final report of the Independent Review of Affordable Housing Supply was launched on 1 May 2019. On Tuesday 9 July, the Minister for Housing and Local Government, Julie James AM, will give the Welsh Government’s response to the recommendations made by the expert panel that undertook the Review. This blog post highlights some of the Review’s main recommendations. If you want to find out more about why the Review was commissioned, and what affordable housing actually is, then why not read our blog post from June 2018: What next for affordable housing in Wales?
The Review had a very wide remit reflecting both the complexity of our housing system, and also the impact decent quality affordable housing has on broader social policy goals. Those goals, like improving health, education and employment outcomes, become almost impossible to achieve when people live in overcrowded, poor quality or unaffordable homes. Or, of course, when people have no home at all. The need for the Review to be wide-ranging was noted by the Chair of the panel that carried it out, Lynn Pamment, in her foreword to the final report:
The review’s remit is exceptionally broad, but intentionally so, as we felt, as a Panel, that it was fundamental that the review took a holistic approach. To consider areas in isolation would undermine the validity of the exercise and not result in the radical change needed in some areas.
So, what are the recommendations made by the Review, and what impact could they make?
Some of the key recommendations are set out below.
Developing effective policy relies on robust data and the Review calls for a better understanding of housing need in Wales. The panel want local authorities to be mandated to provide Local Housing Market Assessments to a consistent timetable, and says they should be updated every two years using consistent methodology and data.
A zero-carbon future
The final report outlines how the Review’s recommendations align with the Well-being of Future Generations (Wales) Act 2015, including its five ways of working and seven well-being goals. This includes a recommendation that all new affordable homes should be near zero-carbon and some funding should be conditional on social landlords bringing forward an accelerated programme of decarbonisation for their existing housing stock. In a similar vein, the Review calls for the Welsh Government to develop a strategy that maps out how modern methods of construction and off-site manufacturing can contribute towards delivering those near-zero carbon homes.
A longer-term rent policy
Social housing rent policy was also addressed, and the expert panel recommended a five-year policy be put in place from 2020-21. The Welsh Government had asked the Review to consider “…how a sustainable rent policy can help determine long term affordability for tenants and the viability of existing and new housing developments.” The Review was able to consider the findings of research led by Edinburgh’s Heriot Watt University which looked at how the current Welsh Government rent policy was meeting its objectives. While the Heriot Watt research found that, overall, rent policy in Wales was meeting its objectives, it also highlighted some tensions in the current system, including scope for better, more meaningful engagement with tenants. Those remarks on tenant engagement chime with work carried out by the Assembly’s Public Accounts Committee in 2016-17 and commitments from the Regulatory Board for Wales and Welsh Government to put tenants at the heart of housing association regulation.
A new era for council housing?
The ability of local authorities to start building new homes in significant numbers has been made more straightforward now that the Housing Revenue Account borrowing cap has been lifted. The Review calls for the Welsh Government to encourage local authorities to use these new flexibilities, and for it to provide financial support where necessary.
On making the most of public sector land, the Review calls for an arms-length body to be established by the Welsh Government that could act as a hub for public sector land management and professional services. The Review suggests that this new body could also be provided with compulsory purchase powers to fulfil its objectives.
Funding affordable homes
Recommendations in the Review’s final report relating to financing affordable housing focus on longer term funding models. A new, flexible five-year Affordable Housing Supply Partnerships model is proposed based on the principles of fairness, quality and ensuring there is transparency on grants delivering value for money. The consolidation of existing funding streams and facilitating the use of private finance, as well as alternative funding solutions, would be part of the proposed new model.
Finally, the Review recommends that funding provided by the Welsh Government to local authorities with housing stock (Major Repairs Allowance) and to housing associations set up following a stock transfer (dowry or gap-funding payments) should be reviewed. The Review suggests this should happen “as quickly as possible following the publication of this report” with future funding linked to decarbonisation and achieving value for money.
Implementation of any recommendations that are accepted may take some time. In some cases, further work and further reviews will be needed and this will undoubtably generate additional workloads for stakeholders, including social landlords and the Welsh Government, when resources are already under pressure. The panel notes that it has “…considered the likely costs of implementation against the benefits that will flow from implementation…” but considers that any transitional costs will be outweighed by the benefits of implementing the recommendations.
Like any wide-ranging review, it will take some time to judge whether taking these recommendations forward has been successful at increasing affordable housing supply. Success depends not just on the Welsh Government, but also stakeholders from the public, private and third sectors working together to deliver affordable homes.
Anyone looking for statistics on affordable housing in Wales can look at the Welsh Government’s latest statistical release on the subject, Affordable Housing Provision, October 2018. Further statistical detail is also available on Stats Wales.
Article by Jonathan Baxter, Senedd Research, National Assembly for Wales