Govt 'wasted opportunity' to solve housing crisis

Govt 'wasted opportunity' to solve housing crisis

The government has “wasted a once-in-a-generation opportunity” to alleviate the nation’s housing crisis by failing to release land for new homes, a committee of MPs has alleged.

A report on the sale of public land, published by the Public Accounts select committee today (July 24), stated the government was in a “unique position” to help release land for new homes but had failed to do this.

According to the report, the government’s objectives were “muddled” from the outset and its target — to release land for 160,000 homes — was unrealistic and “lacked a sufficient and rigorous evidence base”.

The government has committed to deliver 300,000 new homes a year by the mid-2020s and to sell surplus public land to support this.

It also has a target to raise £5bn from the sale of public land.

In fact the committee said the Ministry for Housing, Communities and Local Government would miss its target by a “wide margin” after it found the department would sell only about 57 per cent of the land needed to reach its goal.

It also said its two disposal targets, to raise the highest amount of capital possible and to sell land to build homes, had “inevitable tensions”.

For example, a sale of land that was suitable for new homes might not necessarily have generated the highest profits.

But the housing department and the cabinet office were unable to explain which programme took priority and potential trade-offs had not been considered on a cost-benefit analysis, the committee found.

This meant the programmes were set up to fail, said the committee, and the report has since recommended the government set future targets that are challenging but achievable.

The report showed the Treasury was likely to achieve its £5bn target (for funds raised from selling land) but the committee said this was “more through luck than judgement” and entirely down to an unexpected and unplanned sale of Network Rail’s railway arches.

The committee also found there was a danger that the wrong type of homes were being built through a lack of definition of the terms ‘homes’ and ‘affordable homes’. 

It thought this could lead to developers dodging building affordable homes, such as shared ownership and social rent, and this could contribute to the severe shortage of affordable homes in some areas.

Chair of the committee, Meg Hillier MP for Hackney South and Shoreditch, said: “The nation’s housing crisis has been prolonged by the government’s failure to develop a strategy for public land disposal. We are frustrated that this unique opportunity has been wasted.

“The UK needs more houses. We are baffled that the programmes were not designed with a view to how many homes were needed of what type, and where – nor how the proceeds will be used.”

Ms Hillier said the committee was concerned the nation’s housing shortage would get worse and called on the government to set out a decisive course of action for how it will execute its land disposal strategy so it translates into actual homes.