Autumn Budget and Spending Review submission 2024

Summary

Housing associations are anchor institutions in their communities, with a track record of collaborative delivery in every part of the country.

Housing associations already build a quarter of new homes and drive growth, improve the energy efficiency of 50,000 homes annually and aid a variety of public services through supported and older persons’ housing provision.

For every £1 of public grant housing associations unlock £4 of private investment. They also save residents £9bn every year compared to if they were living in the private rented sector and save the government £6bn annually through reduced welfare spending.

The recommendations in this submission, taken together, would create the conditions for housing associations to:

• Help deliver the biggest increase in affordable housebuilding in a generation.
• Progress our shared priorities through investment in existing homes to make them safe, green and high-quality.
• Play a critical role in supporting public services to rebuild.

We have structured our submission around this government’s missions.

Mission: Kickstart growth - how housing associations can help deliver 1.5m new homes

Building social homes is both the key to ending the housing crisis and kickstarting growth. Research from Shelter and the National Housing Federation, carried out by CEBR, shows that building 90,000 social rented homes would result in economic net benefits worth £51.2bn.

Due to current significant financial and regulatory pressure and uncertainty, many housing associations are reducing their development programmes and their expenditure on Section 106 homes.

To turn this around, we are asking for:

• A 10-year rent settlement with annual increases capped at CPI+1% and a fair and consistent approach to rent convergence for those homes below formula rent is needed to rebuild housing association capacity. NHF analysis shows this is on average affordable for social housing tenants. Adjustments to the welfare system should also be made to provide appropriate protections for both existing and future social housing tenants.
• A rapid boost to the Affordable Homes Programme, extending the current programme by one year, with a funding boost, a shift towards social rent, and greater flexibilities around grant rates and regeneration.
• A new long-term Affordable Homes Programme from 2026 for social rent and shared ownership, with minimum funding of £4.6bn per year on average for the first Parliament, on a minimum five-year rolling basis.
• Changes to the scope of the Economic Crime Levy for housing associations.

Mission: Break down barriers to opportunity through safe and decent homes

Housing associations are committed to providing safe, high-quality homes that are fit for the future. But the scale of necessary investment, on average £40,000-50,000 per home, is too substantial for housing associations to meet alone.

With a partnership approach between our sector and the government, we can ensure residents’ safety more quickly, meet these investment challenges and further unlock new development and regeneration capacity.

We ask that the government:

• Provide equal access to the Building Safety Fund and Cladding Safety Scheme to social landlords.
• Underwrite buildings insurance risk for buildings with safety defects.
• Remove VAT from building safety works, extend and expand the relief on Energy Saving Materials and review VAT for all refurbishment works.
• Ensure that the funding commitment to support people to evacuate residential buildings in an emergency supports the most vulnerable.
• Review and prioritise the timeframe for introducing additional regulatory requirements.
• Work with our sector to develop building safety, decency and decarbonisation funding into a new long-term £2bn per year Social Housing Investment Fund.

Mission: Clean energy superpower – housing associations can underpin the Warm Homes Plan

Housing associations are already at the forefront of tackling the twin challenges of the climate crisis and fuel poverty. Housing association homes are more energy efficient than any other tenure and because of our scale we have a unique ability to drive retrofit innovation and supercharge the supply chains that all other housing tenures will draw upon.

To get the Warm Homes Plan underway we recommend the government:

• Quickly roll out Wave 3 of the Social Housing Decarbonisation Fund (SHDF) with a funding boost in line with Labour’s Warm Homes Plan.
• Develop a new round of the Energy Company Obligation and review social housing’s access to it.
• Implement the recommendations of the National Infrastructure Commission’s Second National Infrastructure Assessment, to ramp up the delivery of heat pumps and heat networks alongside a social energy tariff.

Mission: Build an NHS fit for the future – housing associations’ role in rebuilding public services

Supported housing helps half a million people in the community and is a vital part of a sustainable housing, health and social care system. Supported and older persons’ housing relieves pressure on a range of public services and will be essential if we are to build an NHS fit for the future.

We recommend the government:

• Provide emergency revenue funding for housing-related support to local authorities in financial crisis, roll over support contracts for one year, and extend and uplift the Rough Sleeping Initiative and Homelessness Prevention Grant, to ensure vital homelessness and supported housing services can continue to operate.
• Commit to long-term, ring-fenced and increased funding for housing-related support which is held nationally but distributed locally and is at least £1.6bn per year to ensure the continued viability of vital supported housing provision.
• Reinstate the £300m Housing Transformation Fund, or an equivalent, to integrate health, social care and housing and deliver supported housing strategically.
• Commit to 167,000 more supported homes by 2040 and ensure the AHP and rent settlement covers the costs of achieving this.