Andy Burnham is absolutely right to realise he has to change the Government’s relationship with its citizens. He is also right in realising a part of this is actually about weakening the control of the civil service hierarchy on policy making. Hence the importance of the No 10 in the North.
To fundamentally transform the UK’s economy and tackle the regional and generational disparities in wealth and opportunity he will however, have to actually tackle the housing supply issue and this will require fundamental change in the culture of national and local government. Without this, good intentions will come to nothing such is the built in inertia of current practice .
It is no good expecting the private sector to solve the housing supply issue as we have for the last 40 year. To transform the housing market in the UK, Government has to spend money directly on house building and it has to enable if not force local authorities to build subsidised housing at scale as well as reinvigorating the housing association sector.
Most local authorities are already doing a bit and a few have done a lot but all need to do a great deal more. To do this there has to be a fundamental shift in process and culture within the public sector.
Local government financial rules
The first thing that needs to change are the arcane government financial rules which have barely altered since 1965.
These fail to treat housing expenditure as investment with a positive value and treat it as a cost. This has directly led to the situation where we spend far more on temporary accommodation than we do on house building and senior civil servants accept this as rational.
The second area is local government finance rules which are Byzantine at best and bizarrely heavily influenced by CIPFA the finance directors trade body. They are a notoriously conservative organisation.
These impose controls on local authorities ability to invest and borrow unique in Western Europe. It mitigates against innovation and actively restricts investment in housing.
These rules reinforce a prevailing mind set across the public sector that the role of those employed within it is to avoid all risk regardless of the fact this causes greater risk (cf spend on temporary accommodation) and that following process is more important than achieving results.
In local government circles, people adoringly refer to the golden triangle of management. This is the grouping of CE , Finance Director and Legal Director who enjoy Thatcher era powers which enable them to block elected politicians from spending money or in effect doing anything they deem risky or controversial .
This is significant because borrowing money to build and directly intervening in the housing market in a positive way generally fall into these categories. People who have climbed the management ladder generally (there are honourable exceptions) have done so because of their adherence to orthodoxy and caution. They are unlikley to be people to break a mould.
Barking and Dagenham where we built 5,000 council owned homes, most during Covid, is a good example of what can happen when bold political leadership and officers align. Ambition combines to make things happen, but this level of delivery has rarely been repeated.
The Gascoigne Estate regeneration is one of London’s most successful and comprehensive regenerations of recent years.
The same negative mindset has also become entrenched in too many planning authorities that see their function to prevent anything bad happening rather than to enable the good to happen. Its all too common for planning officers to over focus on detail rather than the wider benefit of a scheme. The excellent often being the enemy of the good and all to often the discussion being about the width of a path rather than the overall product a development delivers.
Economic growth is housing growth
If Andy Burnham wants to transform the UK we need to build the £1.5 m new homes not just to solve the housing crisis but to restart wider economic growth . This means actually funding subsidised housing directly, not through the side ways land tax of S106 but by incentivising civil servants to do this whether through Homes England or directly. It also means instructing local authorities to borrow at scale to build and changing the nature and role of their finance directors to enable this.
At the same time, planning authorities should be encouraged to develop a zonal and parameter based approach which enables rather than looks to restrict. This makes planning discussions more strategic and less detailed. It would also be worth looking again at S106 and whether to replace with a tax on value uplift as a means to support Council efforts and funding.
At the moment S106 works on one level, it enables local decision makers to get a benefit from permitting homes to be built. We have all had the “ don’t worry about the quality feel the 106 cheque” conversation but its logically perverse to see providing “affordable” housing as off setting the disbenefit of development which is in its self desirable and using a location based tax to deal with a national problem is equally dubious.
The financial challenges faced by Housing Associations who were in effect allowed to become too dominant and grow too fast also exposes a key weakness in a system which generally relies on them purchasing the affordable homes. Which takes us full circle back to the need to get local authorities building and acquiring housing. Will Burnham finally find a means to unlock Council housing delivery. The opportunity is in plain sight.
Pat Hayes is Executive Director of Regeneration, Housing & Environment at Slough Council and has a long history in local government. He was Managing Director of Be First, Barking and Dagenham Council’s independent regeneration arm and was Executive Director of Regeneration & Housing with Ealing Council during which time the borough became one of the most successful in London at attracting in new developments and transforming its public housing stock.
Before joining Ealing, Pat worked for Transport for London as Director of Borough Partnerships and prior to that, spent four years at Lewisham Council as Executive Director for Regeneration and Environment. Pat has also worked for five other boroughs during a 25-year career in local government.
