Brown's eighth Budget backs Barker's call for more money in July's spending review
The Treasury has bowed to sustained pressure from the sector and promised to increase investment in social housing in July's spending review.

The announcement was buried in the 174-page Budget report on Wednesday after the Barker Report earlier that day had called for £1.6bn to be spent on an extra 23,000 social homes each year.

The Treasury has refused to state how much it will spend but, with other sectors having to tighten their belts, it marks a significant step up the government agenda for housing.

A Whitehall source said: "We are accepting the need for additional spending in the 2004 spending review.

"I can confirm there is going to be more for social housing.

"We do, however, want to see the sector do more in terms of delivering efficiency gains."

The source also hinted that the regional housing boards would get an expanded role beyond the merger with regional planning bodies called for by Barker and backed by the chancellor.

"There is a wider question of the strategic guidance at the regional level for things such as Supporting People or the market renewal pathfinders, so the housing boards could have a broader remit here," the source added.

The Treasury-sponsored Barker Report on housing supply, which was released just hours before the Budget, concluded that social housebuilding must double if housing demand is to be met.

The report estimated that annual supply of social housing needs to rise from 21,000 – the 2003/4 level – to almost 45,000.

The bill for building the homes was put at £1.6bn, to be paid by the government and registered social landlords.

Barker also set out a number of recommendations to improve housing supply, which she believes will make the UK economy more stable and contribute to social fairness (see "Barker's blueprint", below).

She said: "Continuing at the current rate of housebuilding is not a realistic option, unless we are prepared to accept increasing problems of homelessness, declining affordability and social division, decline in standards of public service delivery and increasing costs of doing business in the UK – holding back our economic success."

Barker’s blueprint for housing supply

  • A development tax to complement planning gain; section 106 agreements scaled back, but still used to obtain affordable housing.
  • Regional housing boards to merge with regional planning bodies, and the creation of independent regional planning executives.
  • Councils to be allowed to benefit from the increases in council tax revenues generated by new housing.
  • Equity stakes introduced for council tenants: intended to give tenants right to buy, yet let councils benefit from rising house prices.
  • A community infrastructure fund of £100m-200m.
  • Government should set target to keep down house prices.
  • English Partnerships to get more cash to buy land for housebuilding.

Source

Housing Today