UK (Parliament Politics Magazine) – Peabody chief urges the Treasury to class social housing as vital infrastructure, calling it key to fixing the UK’s housing crisis and boosting growth.
As reported by The Guardian, a leading UK housing chief has urged ministers to label social housing as “critical infrastructure” to secure major investment.
What did Ian McDermott urge the Treasury to do about social housing?
Ian McDermott, who leads housing giant Peabody, has called on the Treasury to designate social housing as essential infrastructure. He argues the move would allow Chancellor Rachel Reeves to channel billions into the sector without breaching her fiscal rules.
According to him, only 10% of social housing funding supports actual homebuilding. He said the rest goes to temporary accommodation – a sharp reversal from decades past.
Mr McDermott stated,
“For too long, social housing has been seen as a subsidy and a cost rather than an asset and critical national infrastructure for the country.”
He is set to chair the G15 housing group from June and called the 1.5 million homes target “very stretching,” but said the sector can help meet it.
Mr McDermott said,
“We own land that could potentially build 20,000 homes. Can we build it? Yes, we can. It is possible. There is an issue about the workforce and skills. But can we bring about that generational change? Yeah, we can. But we need the government to be sympathetic and supportive of our asks.”
He called the economic case for housing investment “unarguable,” adding,
“The social case is unarguable too. Housing is national infrastructure because, at the core of contented, thriving communities, is decent housing. Unless you recognize it as essential to a productive, thriving, and contented Britain, you’re going to miss the point.”
The association chief acknowledged the anger but emphasized that providers do care and the sector must improve.
He stated,
“England has some of the oldest housing in Europe and the ombudsman is right to say that our not-for-profit sector is under intense pressure. Looking after residents’ homes well is our top priority and needs to be funded through rental income.”
Mr McDermott said,
“This is heavily regulated and was subject to government-imposed cuts for five out of seven years, which eroded our capacity to invest. As a sector, we’re catching up but with inflation and the cost of living crisis it has been a perfect storm.”
What did the London Housing groups write in their urgent letter to ministers?
The letter from London-based associations including L&Q, Peabody, Clarion Housing and Notting Hill Genesis stated,
“It is important, to be honest about the scale of the problems and the solutions needed. You have inherited the worst housing situation in living memory. There is a housing emergency, with London at the epicentre, and new supply in the capital has already fallen off a cliff.”
The letter warned that London’s social housing waiting list exceeds twice the population of Cambridge.
It described the temporary housing crisis as “almost beyond words” due to its severe impact on people. It warned that London councils alone are spending nearly £4 million daily, while rent policy changes since 2016 have drained £6.6 billion from the sector.
The letter added,
“By the end of the parliament affordable housing completions will have fallen to the lowest levels since the Second World War without urgent and specific interventions for London.”
What did Shelter and the National Housing Federation recommend to meet the 1.5 million homes target?
According to Shelter and the National Housing Federation, hitting the 1.5 million new homes target requires 90,000 social homes annually. The investment needed is about £11.8 billion each year.
The investment could create nearly 140,000 jobs and deliver a much larger economic return, breaking even within three years.
What did the Ministry of Housing say about tackling the housing crisis?
A spokesperson for the Ministry of Housing, Communities and Local Government stated,
“We’ve taken immediate action to fix the housing crisis we’ve inherited and kickstart the biggest expansion to social and affordable housing in a generation. This included, they said, £800m for affordable homes, and changes to the right to buy, with a proposal for a long-term rent deal for social home providers to provide certainty on income.”
How is Andy Burnham urging ministers to tackle Britain’s housing crisis?
Ahead of next month’s spending review, ministers face ongoing pressure to release extra housing funding.
Andy Burnham, Labour mayor of Greater Manchester, spoke in London on Saturday. He demanded a plan to boost social housing builds beyond sales.
Labour’s housing target
- 1.5 million homes – Labour’s target for new homes in England by 2029, averaging 300,000 per year 14.
- 1 million homes – Expected shortfall, with only 500,000 likely to be built in England under current plans 14.
- 50% affordable homes – Requirement for new developments on released “grey belt” land