On 9 September, Wales Audit published its report on the delivery of affordable housing in Wales. Central to the report is monitoring progress against the Welsh Government’s target to deliver 20,000 low carbon social rent homes within its current term (i.e. 2021-2026).
The Welsh Government exceeded its previous target of delivering 20,000 affordable homes during its 2016-2021 term. However, the end of term count of 23,061 homes included 187 shared equity homes and 8,875 Help to Buy homes, both of which are excluded from the new target. Indeed, Help to Buy (Wales) homes do not meet the Welsh Government’s own strict definition of what constitutes affordable housing as set out in Technical Advice Note 2 Planning and Affordable Housing.
Although the Welsh Government’s current Programme for Government includes a target to ‘build 20,000 new low carbon social homes for rent’ between 2021 and 2026, in June 2021, the then Minister for Climate Change made it clear that the Welsh Government would count some homes that do not meet that definition.
The current target includes social housing delivered by social landlords (the 11 Local Authorities that have retained their housing stock, or the 31 Registered Social Landlords in Wales) and affordable homes on private developments secured through ‘section 106 agreements’ under the Town and County Planning Act 1990. However, the Welsh Government also counts acquisitions of existing properties and long-term leases on privately owned properties that local authorities secure through the Leasing Scheme Wales. Consequently, not all of the 20,000 homes will be additional homes: some may be existing housing stock that has become social homes for rent.
Moreover, the Welsh Government counts some homes that are not low carbon. In addition to the acquisition or long-term lease of existing homes referred to above, privately funded affordable homes, such as those provided via S.106 agreements, must meet only the WDQR minimum space standards. Only Welsh Government funded new builds must meet the low carbon standards set out in the 2021 Welsh Development Quality Requirements (WDQR), including non-fossil-fuel heating systems, very low carbon emissions and gigabit-ready broadband.
Notwithstanding any debate about the extent to which the precise wording of the 20,000 home target is being adhered to, all of the homes will undeniably provide an urgently needed solution to the housing crisis facing Councils throughout Wales, providing a better solution than B&Bs or hostels for people who are homeless or at risk of homelessness or in general housing need.
With a challenging target emphasising new builds, the Welsh Government needed to increase the construction of affordable homes. However, the data shows that construction has fallen since 2020/21, when there were 3,045 new build affordable homes. The reduction was particularly sharp in 2021/22 (2,278 new builds), recovering significantly in 2022/23 (2829 new builds).
Affordable homes delivered 2019/20 to 2022/23
Source: Welsh Government annual affordable housing statistical releases
Wales Audit recognises that this reduction in delivery coincides with the introduction of sustainable drainage (SUDS) requirements, the phosphate issue affecting five Special Area of Conservation (SAC) rivers in Wales, land supply issues linked to the age of many adopted LDPs, and capacity in the planning system.
The report finds that although the Welsh Government’s pipeline suggests 19,913 homes will be delivered by the end of its current term in 2026, significant additional investment of between £580m and £740m is required to achieve this. Without this additional funding, Wales Audit estimates that between 15,860 and 16,670 homes will be delivered against the target. Interestingly, this figure is roughly comparable to the total achieved in the previous term if Help to Buy homes had been excluded.
It is worth noting that, in some cases, developers provide ‘commuted sum’ payments to provide off-site affordable housing. Audit Wales calculates that, as at March 2023, £23m of such funding was being held in Local Authority reserves. Releasing this funding can form an important part of the solution.
The report makes seven recommendations, two of which are of particular relevance to Local Authority Elected Members:
R4 The Welsh Government should review the approach to housing needs assessment, including assessing why national estimates appear to have significantly underestimated the scale of existing need and how that can be rectified.
Elected Members have a vital role to play in ensuring that new Local Development Plans help address Wales’ housing crisis. Simply replicating past build rates or following population projections will not result in the step change that is required. Housebuilders have contributed a significant proportion of new affordable homes over the last decade via S.106 agreements, and while not perfect, their contribution needs to be supplemented by, rather than replaced by, additional measures, including the growing contribution made by RSLs themselves. In addition to addressing homelessness and critical housing need, many local authorities will be considering the role of housing growth in attracting and retaining our young people, countering our otherwise ageing population profile to ensure our communities remain economically and socially sustainable.
R7 In line with its commitments in response to previous Auditor General and Public Accounts Committee recommendations, the Welsh Government should work with local government partners to develop sustainable solutions to the capacity and delivery constraints in local government planning services, including options for developing the planning profession and greater regional working.
RTPI Cymru welcomes the recognition of the resource challenges facing Local Planning Authorities, having been campaigning on this topic for several years. Previous Wales Audit Office research showed that between 2009 and 2021, local planning authority budgets reduced by 50% in real terms. In January 2023, our survey of RTPI members in Wales called The Big Conversation/Yr Sgwrs Fawr found that 61% of all respondents reported being overstretched at least several times a week. This figure was 74% when looking only at responses from Council planning officers. Our UK-wide membership survey in 2023 identified the six main challenges facing the profession, all of which come back to resources.
The RTPI is working with partners on a number of measures to help address this issue, including exploring apprenticeships and bursaries and raising awareness of planning as a career option in schools and universities, to grow the profession. Thought also needs to be given to how we can focus the resources we do have on what really matters. Recent research commissioned by RTPI Cymru explores ways of building capacity through collaboration and change.
Earlier this year, the Welsh Government committed to increasing planning application fees with a view to achieving cost-recovery over the next few years, with an expectation that this additional income is re-invested in the planning service to increase capacity and improve service delivery. Your support, as Elected Members, in ensuring this happens, will be essential. The Wales Audit report on affordable housing helpfully provides another example of how a properly resourced planning service supports delivery of priority outcomes.
Source: Wales Audit report on Affordable Housing, September 2024