A group of six housing associations is calling for social housing to be reclassified as critical infrastructure ahead of next week’s spending review in a bid to receive extra funding.
It comes as housing secretary, Angela Rayner, is holding out in negotiations with chancellor, Rachel Reeves, over the proposed level of funding for affordable homes while also trying to preserve cash for local councils, homelessness and regional growth initiatives.
The reclassification of social housing would allow the chancellor to provide extra funding without breaking her fiscal rules. Housing bosses argue that building more homes would alleviate the significant shortage of social homes as well as reduce the number of people living in temporary accommodation.
Nick Atkin, chief executive of Yorkshire Housing, said: “Housing has a pivotal role in economic growth. Reclassifying investment in affordable homes as infrastructure spending is a vital step to unlocking the long-term confidence and funding needed to build at the scale to meet the government’s ambition.”
“This was echoed at a recent roundtable with senior figures from major investment firms and leading economists, where there was clear consensus that reclassification would boost investor confidence, create jobs, increase lending and ultimately drive the growth in housebuilding our country urgently needs.”
The group of housing associations said that the reclassification was imperative to ending short-term funding cycles for affordable housing.
The submission said: “Reclassification is the only way we can deliver the pipeline of new homes needed, alongside the decarbonisation of existing homes and the renewal of our towns and cities.”
“Housing is fundamentally essential and significant infrastructure, and therefore funding should be classified in the same way as other significant national projects such as road, rail, schools and hospitals. With the support of recent planning reforms, new homes could be delivered at the pace and scale needed to tackle the housing crisis.”
Currently, 14 areas of national life are listed as critical infrastructure, including transport, health, energy, defence, data and food. If housing was added to the list, it would make it simpler for related spending to be excluded from the usual fiscal rules as it would not count against government debt.
Research from the National Housing Federation and Shelter suggests that around 90,000 new social homes are needed each year to hit the government’s goal of 1.5 million new homes, which would come at a cost of around £11.8billion a year.
