16 COMMENT
PREVENTION IS BETTER THAN CURE A surprising ally to Shelter has emerged in the shape of the National Audit ffi ce, which acts as the overnment’s spending watchdog. t is calling on Ministers to incentivise spending on homelessness prevention to avoid the need for families to be housed in B&Bs and to cut the huge growth in expenditure on short-term solutions.
n a recently published report, the NA has highlighted that councils spent a combined total of 2.13bn on temporary accommodation in 20232, nearly double what they spent in 2011. areth Davies, head of the NA, said: There have been repeated delays to local government fi nance reform and central overnment can no longer resort to short-term solutions to support local authorities. Action to address this must resolve the systemic weaknesses in local government fi nancial sustainability through a comprehensive, cross-government approach.
The NA recommends that the Ministry of ousing, ommunities and ocal overnment take the lead in building a cross-government approach to local government fi nancial sustainability. f course it is the very same department which is also taking the lead on trying to build 1. million new homes by the end of this arliament in 2029. Some joined- up thinking is clearly called for As part of the upcoming Spending
eview, the NA is urging Ministers to develop a funding and service reform plan that focuses on delivering long-term value for money. t says M and the Treasury should explore how the impact of preventative services can be evaluated and incentivised to deliver better outcomes and improved value for money. ver recent years councils have been given temporary assistance with their budgets, including 233m last autumn for homelessness services, but these emergency handouts do not address the underlying fi nancial pressures and they can create unintended longer- term risks.
The NA reports that the fi nancial pressures created by using expensive short-term solutions are limiting councils’ ability to invest in homelessness prevention. Spending on homelessness services increased in real terms by 10 from 1.9bn to 3.0bn between 2011 and 20232. ut a signifi cant portion of the omelessness revention rant which councils receive is used to fund temporary accommodation, rather than being spent on prevention work. ver the same period, spending on other housing services, which includes some preventative services, fell by 2m.
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This gives the strong impression that Whitehall’s left hands and right hands are not working in unison.
A NEW APPROACH ete Marland, chair of the ocal overnment Association’s economy and resources board, said: The NA rightly highlights that funding pressures are being exacerbated by a lack of reform, which has weakened the fi nancial sustainability of councils and left them with a complex, outdated funding system. reating an improved and more sustainable funding system for local government is critical to strengthen the value for money of local spending and, most importantly, to improve services for communities.
Sir eoffrey lifton-rown, chair of the ublic Accounts ommittee, said: Short-term support is a sticking plaster to the underlying pressures facing local authorities. Delays in local audits are further undermining public confi dence in local government fi nances.
There needs to be a cross-government approach to local government fi nance reform, which must deliver effective accountability and value for money for taxpayers. At the same time, council fi nances are under extreme pressure and many are struggling to keep their head above water. ou would think that everyone was pushing at an open door in Whitehall, as members of the overnment from the rime Minister down have been saying that England’s housing crisis cannot be solved without forcing councils to build more homes.
Ministers have repeatedly declared that binding targets will compel authorities to build 30,000 homes a year. ut the volume housebuilders, local councils and housing associations do not believe such fi gures are attainable without a massive increase in the availability of resources adding to the
pressure on achel eeves, as hancellor of the Exchequer, to conjure up billions of pounds in new investment. uilding over 100 new towns or extensions to existing communities will help deliver a substantial number of homes, but with the plans for these very much in their infancy it is debatable when the fi rst new homes in the new towns will emerge.
The National Housing Federation is talking in terms of a 10 year plan, which is looking increasingly more realistic in the eyes of many across the whole housing and construction sector. This would surely be a better fi t for the promised long term housing strategy which the overnment has started work on producing.
Modelling done by the NHF of housing association fi nances shows that the social sector could deliver 320,000 new affordable homes over fi ve years. ut this is dependant on a signifi cant programme of support being put into place, including a 10 year rent policy, 2bn a year in grant to invest in existing social homes; and a ten-year Affordable Homes Programme with an average of .bn a year over its fi rst fi ve years. With a larger investment aimed at the whole social housing sector, including local authorities, an Affordable omes rogramme of .bn per year across all social landlords, with a larger uptick in Section 10 contributions, could deliver 00,000 homes over fi ve years. n this case development by year
fi ve would reach 10,000 affordable homes, including 90,000 for social rent. f sustained into subsequent years, this would be enough to meet housing needs and to make the contribution which the NF estimate is required to build 1. million new homes. No doubt we shall have to wait until une before we fi nd out how persuasive the NF has been, and also how open minded the Treasury has been.
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