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England needs 90,000 social homes a year to beat ‘broken housing system’

The Government must boost funding to local authorities as well as using public land to build social housing instead of selling it for a profit, a select committee said

A cross-party group of MPs wants the Government to commit to a major drive on building social homes to pull the nation out of what it called a “social housing crisis”.

In a new report from the Housing, Communities and Local Government (HCLG) Select Committee, research showed ministers will need to think smarter about how public land is used and seriously increase funding to councils – and ensure 90,000 social homes are built a year to beat the current shortfall.

Despite ministers setting out a target of 300,000 new social homes per year by 2025, the volume of social housing created since the announcement in 2017 has stayed in the low thousands.

It will take a funding uplift of £10bn a year to get the social housing initiative on track, the committee said.

The number of households living in temporary accommodation like B&Bs and hostels has soared by 82 per cent in the past decade, with the number of rough sleepers shooting up by 165 per cent in the same period, according to pre-Covid-19 counts. The HCLG committee estimated that more than a million homes were lost from England’s social housing stock since 1981, yet only 6,827 new homes were built last year.

Councils and social housing providers are “at the limits of what can be achieved” on current budgets, the report said, but the Government could reduce the public spending required if it used public land to build on instead of selling it for revenue. “The Government’s strategy of disposing of public land to the highest bidder is wrong headed,” the committee said.

Local authorities should be allowed to keep the entirety of receipts from Right to Buy homes too, according to the MPs, to make it affordable for them to create replacement social housing.

The report makes it clear that Government action on social housing is needed urgently with an expectation that the Covid-19 crisis will put even more pressure on the system that is “already under significant strain”. The creation of more social homes would benefit the economy in the long-term, it said, as well as creating jobs in the construction sector.

The Government should make building social housing a national priority again

“The collapse of social housing building since the 1980s has had terrible consequences on our ability to provide adequate housing for those who need it,” Clive Betts, committee chair and Labour MP for Sheffield South East, said. “The last decade has seen a surge in families living in temporary accommodation and people rough sleeping, while at the same time we have come to rely on the private rental sector to shore up the creaking social housing capacity.

“We need at least 90,000 new homes a year to get to the level of social housing we need, but this is achievable. We believe this target can be reached in five years, but only if the Government gives providers sufficient financial backing and reforms the wider landscape that social housing providers operate in. They must ensure that the money is there to build, that land is available to build on and allow flexibility to buy surplus housing where it is not needed in the private sector.

“The system must ensure that any housing sold via Right to Buy is replaced like-for-like, and that local authorities are allowed to retain all the receipts produced to enable them to achieve this.

“This must be a long-term commitment to creating a social housing system that meets long-term demand. It will be challenging but it is achievable.”

Cutting private rent costs would also reduce the pressure on the social housing system, the report said, and would mean that less had to be paid out in housing benefit.

Social landlord Clarion Housing Group gave evidence to the committee’s inquiry. Chief executive Claire Miller said the report was “very welcome”.

She added: “Clarion is the largest social landlord in the country and we built over 1,800 affordable homes last year, but to scale up further, we need more subsidy.

“We build every social home at a loss and in London the problem is especially acute. Extra grant finance would allow us to build more homes and spark growth into the construction sector at a time when it is desperately needed. If the Government wants to “build, build, build”, it should adopt the findings of this report and make building social housing a national priority again.”