23 Nov 2011

Housing plans ignore astonishing numbers

It’s rare that the government serves up a truly astonishing statistic.

The housing strategy was released on Monday and debated in parliament that afternoon. On that same day the DCLG received statistics from the Homes And Communites Agency (HCA) about the number of affordable houses under construction. On Tuesday, the numbers were released to all of us.

Opposition housing minister Jack Dromey spotted that this represented a 99 per cent decline in HCA funded affordable homes from the last fiscal year to the first half of this year. If you dig a little deeper and go to the sub-regional stats, there’s some incredible numbers.

This is the impact of the huge cut to the housing budget capital programme announced by the coalition government’s spending review in 2010.

In east and south east England, 10,865 affordable housing starts over the fiscal year ending in April. Since April this year, 37 ( in total).

In the north east and Yorkshire and the Humber, 3,843 affordable housing starts last fiscal year. Since April this year, less than one per week. In south and south west England, last fiscal year there were 7,219 affordable housing starts. Since 1 April this year, less than one a week.

Last financial year (pre-spending review) there were 16,331 total affordable housing starts in London. In the first half of this financial year: 56. That’s two a week.

Between April 2010 and March 2011: there were 3,766 affordable housing starts in north west England. Guess how many since? Zero. Not one single affordable house, under the government definition, across the north west of England.

As an aside, I can’t find comparable up to date statistics for Scotland yet. But similar stats seem to suggest that there were more houses like this built in Scotland in Q2 than in England so far this fiscal year. As Scotland’s population is a tiny proportion of England’s, and its issues with affordability are small compared to particularly south east England, that does seem remarkable.

So what’s going on? Are there government housing gurus running around the DCLG shouting: “We are the 99 per cent reduction in affordable housing”?

No, I don’t think so.

These numbers were running at about 54,000 per year. Since April its been 454. In this parliament that number will go back up to a few thousand, as the new government affordable homes programme kicks in.  These programmes are predominantly about renting. So we are at the bottom of a one year “funding valley” for affordable housing, though it should be pointed out that the other side of the valley will be far, far less high. Something similar happened with university funding.

But the government’s decision to hit the affordable housing budget by 60 per cent, and to go for front-loaded cuts to capital budgets (which tends to be spending with a bigger knock-on effect, or multiplier, in the rest of the economy) may clearly have had a wider impact across a weak economy. The apparent wish to communicate mass homebuilding and affordability on Monday, when Tuesday’s figures were a direct result of their previous decisions, should give pause for thought.

I should point out that the numbers above are from the Homes and Communities Agency. They were responsible for 91 per cent of affordable housing starts last year, but there are other sources, such as local authorities, so-called section 106 agreements.

I should also point out that in the Housing Strategy document on page 21 is the line: “there is a real need for more affordable housing”. Just a few hours later the HCA reported falls of 95-99 per cent.

Follow Faisal Islam on Twitter: @faisalislam