Will Policy Exchange still be the go-to think tank for housing policy under this government as it was for Cameron’s? The latest contribution to the post-Brexit housing debate comes from Alex Morton, formerly of PE and behind several of the ideas that the last government adopted, notably the sale of high-value council houses. When he left PE in 2013 he moved to No.10 as housing adviser, until April this year when he jumped ship to become a lobbyist.
His advice to Theresa May on delivering her One Nation housing policy will, however, probably be ignored. In a rambling piece that’s riddled through with his distaste for local government, Morton offers few new ideas and is largely negative. His first point, that ‘the key structures are broken’ is hardly an inviting one, especially as it turns out that the main villains of the piece aren’t (say) developers who build at a pace that suits their profits but are – yes you guessed it – local authorities. And their main failure is to create over-elaborate local plans that are invariably behind time and fail to prioritise housing. He claims that ‘over 300 councils failed to oversee delivery of housing need’, which means there are precious few that do.
This obvious exaggeration ignores the dual pressures that council planning departments face – to deliver plans and to administer development control – with steeply falling resources. In 2009/10, councils spent £2.3 billion on planning: spending is now less than half of that, at just over £1 billion. It is hardly surprising that many councils – particularly smaller ones – struggle to provide even the minimum service expected of them. Of course there is underperformance, and some councils have no doubt cut planning staff more than they should so as to maintain spending on, say, homelessness. But no government can expect to have a first class planning system when its resources have been decimated.
Morton’s ire is then turned on central government, for failing to introduce the reforms he thinks are needed. He offers grudging praise for some of the changes to the planning system ‘since 2015’, but doesn’t acknowledge that planning policies about housing (especially affordable housing) have been the subject of constant tinkering for the last five years, which has hardly helped to achieve consistent decision-making. In any case, firing random shots at the planning sector is hardly helpful to a government looking for ‘One Nation’ policies.
Morton’s dislike of councils extends, too, to housing associations, who are said to gobble up twice as much grant to build rented homes as the government now spends on shared ownership properties. He ignores the savings in housing benefit this achieves, despite there now being plentiful sources of research to remind him. But he gets his sums wrong anyway – the government is planning to spend £4.1 billion to build 135,000 homes for shared ownership, that’s an average grant of £30,000 a piece compared with £27,800 for Affordable Rent dwellings in the current programme that’s being run down.
To be fair, he makes the worthwhile point that stoking up demand (as the previous Chancellor did) is unlikely to stimulate more supply. But he seems to think that councils could secure much more private development even though there is little plausible evidence that councils in general (as opposed to specific cases) are frustrating developments that would otherwise take place.
At this point, Morton’s argument gets confusing, because although he seems to be opposed to measures that stimulate demand (like Help to Buy, presumably) he’s all in favour of more home ownership. This is because it is a) popular, b) what voters worry about and c) necessary for the very survival of the Conservative Party. He’s no doubt right about all these points. But a ‘One Nation’ policy surely (by definition?) has to be directed as much at those who can’t buy (however much they might like to) as to those who can, albeit with some help. The current policy is hugely unbalanced, as Red Brick has pointed out regularly, including as recently as last month. If Theresa May genuinely wants a policy that addresses a wide spectrum of needs, she needs to change the government’s priorities and recognise that many young households aren’t able to buy in any conceivable circumstances, in part because they have to spend so much on rent that they’ll never have the necessary deposit.
It just so happens that the new communities secretary, Sajid Javid, has the perfect excuse to reappraise the investment programme, given the likelihood of a post-referendum recession which will make it harder to sell market-oriented products and in which the construction industry may hit the doldrums. He’s just been sent detailed recommendations from the NHF and CIH on what could be done. Let’s hope he pays more attention to some of the advice he’s getting from those who want a more balanced programme and have experience of delivering one, even though their views are dismissed by Alex Morton as belonging to ‘vested interests’.