In the UK, the Chancellor of the Exchequer has a major influence on all Government policy and on the finance available to Government Departments to pursue their policy initiatives. This was illustrated in the latest budget in March 2004 where the Chancellor announced that it was proposed to cut 40,000 civil service jobs in the next four years as part of a program to save £20 billion.
At the same time the Chancellor announced that affordable housing was going to receive significant attention and investment.
Referring to a Treasury sponsored report produced by Kate Barker, a member of the Bank of England’s Monetary Policy Committee, it was proposed that Government investment in new Affordable Housing should be more than doubled to avoid increasing homelessness and social division. The report suggests scrapping the right to buy (where Council tenants get big discounts to buy their homes), slashing VAT on brown field (previously developed) sites and making housing associations (now the major not for profit providers of Affordable Housing) more efficient.
The current level of housing construction, the lowest since the Second World War, is seen as driving prices up and widening the division between the haves and have nots.
The uneven nature of economic development in the UK has led to major contrasts between the north of England and the south. In some areas in the north, properties stand empty while in some areas in the south (particularly the south east) homelessness and housing need have surged to sustained high levels.
The report calculates that up to 23,000 new affordable houses should be built each year, which would double the current rate. This would mean that investment in new Affordable Housing would increase by between £1.2 billion and £1.6 billion above the current investment of £1.4 billion.
In a wide ranging report other recommendations include:
- councils should charge more Council Tax on second homes
- regional planning bodies should merge with Regional Housing Boards to create a single body responsible for delivering affordable housing
- developers could skip the lengthy planning process if their housing proposals complied with new design codes
- councils should be given incentives for allowing more homes to be built
- a community infrastructure fund worth up to £200m should be established to support transport links to new housing developments.
A follow up review on housing supply should be conducted in three years’ time.
All the above have major implications for Councils. Housing is a fundamental and vital aspect of Councils’ local governance and community leadership roles. While the investment the Government is proposing to make is welcomed by councils, many are concerned that it will come at a price.
Central Government appears to be increasingly of the view that the operation of local planning controls by Councils creates barriers to the delivery of large housing numbers in practice. The operation of the planning system is to be reviewed and new processes are likely to be introduced to make development easier. This may prove a significant challenge to how many Councils see their local governance and community leadership roles.
*Malcolm Morley is Chief Executive of Harlow District Council and can be contacted via the Editor, email info@lgfocus.com.au The views expressed in this article are not necessarily those of his employer.
