Devolution deals ‘fall short’ on housing

Report warns of new metro mayors being short-changed by government over homes.

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Metro mayors are being short-changed by government on housing, claims the Smith Institute.

In a new report, the Institute argues more powers and resources must be devolved to the city-regions to avoid serious shortages of affordable homes.

Analysis of the devo deals in the six city-regions electing metro mayors in May shows the housing crisis is likely to get worse, especially for people on low incomes.

The report says without extra funding the city-regions will see housing supply fall further behind household growth.

Within a decade, Greater Manchester will be 55,400 homes short; the West Midlands 63,000; Liverpool City Region 16,600 and Cambridgeshire and Peterborough 10,800.

The new metro mayors are said to need more housing subsidy to meet future demand for truly affordable rented homes.

A minimum of £2.2bn in grant funding is identified as needed in the six mayoral city-regions over the next decade to provide for enough social rented homes.

The report shows Greater Manchester is short by £831m; West Midlands by £945m; Liverpool City Region by £249m; and Cambridgeshire and Peterborough by £162m – while current housing allocations provide virtually no funding for low cost housing in the city regions.

Metro mayors are also said to need more funding and greater freedoms and flexibilities over housing programmes and budgets.

National programmes, like the Right to Buy and the proposed Build to Rent scheme, are cited as being imposed on mayoral combined authorities.

The report argues metro mayors could achieve better housing outcomes if they were free to tailor policies to local circumstances.

Though the report acknowledges that powers granted in the devo deals are a start, they are said to be ‘insufficient’ given the scale of the housing challenge and the negative effects of welfare reform and austerity.

The report calls for a step change in devolution to city regions, including more funding for affordable housing, establishing ‘single pot’ budgets for housing and growth, full freedoms to borrow to build, powers to regulate the private rented sector, and discretionary powers over the Right to Buy and other national housing programmes.

Paul Hunter, head of research at the Smith Institute and author of the report, said“The government is selling the metro mayors short on housing, especially for social rented homes. Ministers need to adequately fund the devo deals and let the metro mayors shape their own solutions to the housing crisis.

“Top down housing policies and continued austerity won’t deliver the mix of housing that the city regions need.”

Gill Morris, chief executive of DevoConnect, said while the report highlights some ‘clear limitations’ in the current round of devo deals for housing, the thrust of it is clear: joined up housing policy at a local level is the only way to combat serious housing issues in England’s big cities.

She cited London’s recent £3.15bn housing agreement focused on affordable housing as showing that mayoral administrations can have a significant impact.

Richard Hill, deputy chief executive of Sovereign and a supporter of the research, said: “Devolution presents a tremendous opportunity for regions to take greater control of the growth and success of their local area.

“This includes getting the right mix of housing to best meet their needs – and housing associations are ready to work with the new metro mayors, investing and innovating to ensure affordable homes are part of that mix.

“However, this report asks could devolution go further, making sure some areas are not left out and the new metro mayors have the powers and resources they need to achieve their ambitions.”