That’s the way the money goes

this autumn the Treasury will publish the second comprehensive spending review. Since the original review in 1998, we have seen significant increases in investment in housing and regeneration – with expenditure on housing doubling in real terms since 1997. This has had a huge

impact on the ground. The £19bn social housing repairs backlog that we inherited is being turned around, with well over a million homes brought up to the Decent Homes standard, and work on the rest of the stock under way or with plans well advanced.

Meanwhile, we have begun to reverse the decline in supply of new social housing. The 2004 spending review provided for a 50% increase in the provision of new social housing by 2007-08. But there is the imperative to do more. We recognise that a responsive and flexible housing market is essential to securing the UK’s future economic prosperity. Our response to Kate Barker’s review of housing supply set out a range of measures to increase supply and improve affordability, including a target to raise the number of homes being built to at least 200,000 a year by 2016. However, an ageing and growing population indicates that further rises in new housing supply will be required over the coming decade.

We are examining ways of front funding infrastructure at an early stage of development

So we need more housing, both private and social. However, increasing housing supply alone will not create flourishing communities. New housing comes with the need to provide public services; schools, health centres, waste disposal, public transport, green space and policing. As part of the comprehensive spending review we have been conducting a policy review into supporting housing growth, consulting with a wide range of interested groups to understand the barriers to delivery and develop the government’s approach to tackling the infrastructure challenge.

We want to ensure that key infrastructure departments give appropriate priority to housing growth, and provide greater incentives for local authorities to increase housing growth. And at the regional and local level the policy review is proposing changes to infrastructure planning and delivery, and examining ways of “front funding” infrastructure at an early stage of development by allowing local authorities to borrow money against future revenue streams.

In our response to the Barker report we also made it clear that further increasing the supply of new social housing would be a priority for resources in the spending review. Delivering this will not only require significant new investment from government, but also much greater innovation from providers and funders. The government will need to work with stakeholders to maximise the contributions that better procurement and other efficiencies can deliver, and to ensure these gains are re-invested into more new housing. We also need to ensure that we make the best use of our historic investment in social housing to lever in more private finance.