Spending Review 2020: housing measures announced

30 November 2020

The Chancellor announced his one-year Spending Review on 25 November, setting out government funding for 2020/21.

As expected so soon after the Affordable Homes Programme (AHP) was confirmed, there was no announcement of additional funding for new social housing, though welcome measures were announced on decarbonisation and homelessness.

Summary of housing measures announced

  • An ongoing commitment to making homes greener and warmer, including £60m of additional funding for 2021/22 to support retrofit in the social housing sector. The Chancellor also confirmed £320m to extend the Green Homes Grant scheme to 2021/22 and £122m to support the creation of clean heat networks.
  • £151m of new local government funding for rough sleeping in 2021-22, £87m of which will be used for long-term accommodation for rough sleepers. The remaining £64m will go to supporting frontline services through the Rough Sleeping Initiative, funding local authorities' duties to prevent homelessness, and supporting prison leavers at risk of homelessness into private rental tenancies.
  • A £7.1bn National Homebuilding Fund aimed at stimulating private sector development, including £2.2bn of new loan finance.
  • £30m in new funding confirmed for a new Building Safety Regulator but no further funding for remediation of buildings.
  • A £4bn Levelling Up Fund which will be invested in local infrastructure, though not directly in housing.
  • Confirmation that the increase to Local Housing Allowance (LHA) rates will be maintained (in cash terms) next year, though no confirmation that the £20 a week top up for Universal Credit will continue after March 2021.
  • £300m in new local authority funding for adult and children’s social care.
  • A refreshed Green Book, updating the government’s guidance on how to assess potential investments to help address regional imbalances.

NHF View

In our response, we’ve welcomed the funding for decarbonising social homes for 2021/22, which reflects the calls in our Spending Review submission. This is a one-year settlement to reflect the one-year Spending Review, but we would expect further funding in future years in line with the government’s manifesto commitment to a Social Housing Decarbonisation Fund.

We’ve also welcomed the additional funding for homelessness services which will be a vital boost to the sector’s important work to prevent homelessness, particularly while the pandemic continues.

It’s positive to see LHA levels maintained at this year’s levels in cash terms, though decoupling them from rents will mean in some areas private renting will become less affordable over time. However, we’ve expressed disappointment that the government hasn’t committed extra upfront funding for the removal of unsafe cladding or extended the £20 per week uplift in Universal Credit.

The private-sector focused National Homebuilding Fund is a positive commitment, although this was not accompanied by new additional funding for affordable and social housing on top of the £12.2bn AHP.

The extra funding for social care will help address some short-term pressures but we will need to continue to press for long-term certainty and adequate funding for our care and support services.

Update

On 2 December 2020, we published a full briefing which starts with an at-a-glance summary, and then covers each of these announcements in turn, including the NHF response.

Who to speak to

Catherine Ryder, Director of Policy and Research