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Triya Maicha and Jonathan Jarvis, Partners at Devonshires, explore how councils work for them...
For anyone holding a development budget in a local housing authority or a private registered provider of social housing (RP), the £39bn Social and Affordable Homes Programme offers a route towards unlocking new development or regeneration opportunities.
allocation of just over £9.5bn to 33 strategic partners who are expected to deliver more than 70,000 homes outside London, with the GLA set to allocate at least £6bn in the capital. Bids far exceeded what was available, and more than £16bn outside London, plus around £5bn in London, remains to be allocated. That combination of scale and
oversubscription tells us three things: the government’s commitment to the sector is real and long term; councils are with funding held back from the strategic partner route (SP) to prioritise social rent and council homes, and the government indicating that it expects over half of all delivery in London to come from councils (although a formal GLA allocation announcement is still awaited); and that the debate can now move on from ambition to the practical solutions that will get the money to sites more quickly. A ten-year signal worth taking seriously The programme’s greatest strength is its horizon. Ten years of committed capital, alongside a ten-year rent settlement at committees something they have rarely had in more recent times: a basis for planning delivery teams, land strategies and contractor relationships beyond a single spending cycle. The push to accelerate funding reinforces that signal. For councils, now asked to renew their capacity, that certainty is the foundation on which credible business cases are likely to rest. Why timing is the real budget question Certainty of scale is not the same as certainty of pace.
Strategic partners generally claim grant against expenditure incurred, while under continuous market engagement (CME), grant that has been allocated on a scheme-by-scheme basis is drawn down at milestones such as start on site and completion. Either way, the timing of grant is tied to the timing of delivery, so
Earlier this year, Homes England and the GLA asked SP bidders to reconsider limits on how much can be spent in the programme’s early years. For budget than the headline allocation, will determine when schemes start. Bringing funding forward would let
providers move stalled schemes into contract, secure land and respond faster to local need. There are some additional levers that need no new money. For example, the Treasury and HMRC consultation on zero-rating sales of bare land for social housing closed in August. If taken forward, the rationale is that it would remove the need to wait for “golden brick” stage before land transfers, allowing acquisitions and grant claims is advised to watch the government’s response on this issue closely. Routes to the remaining funding The housing minister has signalled that a second comprehensive wave of strategic partnerships is unlikely, with more control passing to mayoral authorities as devolution deepens. Much of the remaining funding is likely, therefore, the new portfolio route. The practical message is to prepare
think harder about partnership. Joint ventures and aligned development plans between local housing authorities (and/ or combined authorities) and private registered providers can combine what each side brings: land and planning powers on one hand, development on the other. That matters more as Section 106, still around a third of affordable
completions, continues to shrink, and as authorities manage Housing Revenue Account debt and stretched capacity. Consistency is what brings investors in Grant cannot meet the housing need alone. Pension funds, insurers and other long-term investors hold the patient capital affordable housing requires, but they generally commit where the rules are predictable. Stable grant rates, bidding routes and conditions are intended to de- risk the wider market and make it easier alongside grant. Mid-programme changes, however well intended, would reverse any progress made on those aspects. Consistency also cuts both ways.
Grant rests in each home in perpetuity, and Homes England can withhold or recover funding where scheme changes less experienced in grant funding should build the discipline of early disclosure into their processes for structuring and managing their delivery programmes. Turning commitment into completions The £39 billion programme is a genuine housing providers, and the sector as a whole has answered with more demand The landscape is also changing, as devolution passes more funding decisions to mayoral authorities and councils rebuild their capacity to deliver homes at scale. What happens next depends less on schemes start, reforms such as those mooted on VAT treatment, that remove friction, partnership models that draw on the strengths of local authorities and RPs (including entities backed by institutional funding), and a funding approach, national and devolved, steady enough for partners and investors to plan at scale. Get those right, and a decade of funding can become a decade of delivery.
WJ201
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