What does the devolution agenda mean for housing associations?

Where there is strong leadership and a vision for change, greater devolution has the potential to transform an area by bringing decision making and investment much closer to local priorities.

The Cities and Local Government Devolution Act 2016 achieved Royal Ascent on 28 January 2016, and gives the Department for Communities and Local Government Secretary of State powers to establish combined authorities and locally elected mayors with devolved powers.

Devolution deals are proceeding in the following areas with mayoral elections pending in April 2017:

  • Cambridgeshire and Peterborough
  • Cornwall (this is the only deal which does not require a locally elected mayor)
  • Greater Manchester
  • Liverpool City Region
  • Norfolk and Suffolk
  • Sheffield City Region
  • Tees Valley
  • West of England
  • West Midlands.

The Greater Lincolnshire deal and the North East deal are not progressing following local disagreements around the terms of the negotiated settlement.

The Federation has been supporting housing associations to collaborate and engage with emerging combined authority structures to maximise the opportunities that devolution can bring. Successful models for ensuring housing associations are involved in strategic decision making and delivery of devolution deal objectives include:

  • The Sheffield City Region Housing Providers Forum and the launch of the Sheffield Compact, who have recently produced a joint bid with the Combined Authority to the HCA on the Shared Ownership Affordable Homes Programme.
  • The Memorandum of Understanding between Greater Manchester Housing Group and the Greater Manchester Combined Authority
  • The West Midlands Housing Association Partnership
  • The Liverpool City Region Housing Association Group.

A devolution deal can provide the investment tools and flexibilities to deliver tailored solutions based on local needs. Examples of new funding mechanisms include:

  • The Greater Manchester deal, which has a Housing Investment Fund of £300m, operating as a four year revolving loan fund for developers.
  • The Cambridgeshire and Peterborough Devolution Deal includes £170m for affordable housing of which £100m for affordable housing, rent and shared ownership is particularly in response to housing issues in South Cambridgeshire and Cambridge City. The remaining £70m is a proposed specific fund to meet housing needs in Cambridge, which Cambridge City Council have indicated would be spent on new council housing.
  • The West Midlands Combined Authority Devolution Deal includes a £200m land remediation fund to enable brownfield land to be brought back into use for housing and employment. It also includes a £500m housing investment fund (mainly locally funded), which will be used to support the development of new homes.

For Combined Authorities that have an elected mayor there are also elements of fiscal devolution within the deals, with mayors able to lower and raise business rates (up to a cap, with the agreement of Local Enterprise Partnerships) to raise funds for infrastructure investment.

The Government is increasingly working towards a goal of local authorities becoming self-sufficient. The 2016 Budget announced that local government will be permitted to retain 100% of business rate revenue by the end of the 2015-20 Parliament and that revenue support grant will be phased out. The consultation on the scheme design has just closed and several devolution areas, including Greater Manchester and Liverpool City Region, will pilot approaches.

Devolution deals also contain a range of measures affecting spatial planning, access to public land and wider public sector reforms.