21 Mar 2023

Levelling Up continues to lack a coherent strategy – The UK Housing Review 2023

Successful projects from the Levelling Up fund so far appear to have been selected without coherence, with considerable time and money wasted in preparing unsuccessful bids, with leaders referring to the process as another example of Whitehall’s ‘bidding and begging’ bowl culture.

That said, the Chancellor has announced new ‘trailblazer devolution deals’ for Greater Manchester and the West Midlands, allowing them to “set the strategic direction” for the Affordable Homes Programme funds in his Spring Budget. This is the first time that the Affordable Homes Programme will be devolved outside of London, supporting project pipelines of up to £400 million, with new powers on housing quality. The deals also propose a broader devolution of retrofit and energy efficiency funding, including commitments to work with both combined authorities to drive minimum energy efficiency standards in the social and private rented sectors and deliver effective advice on retrofit to residents.

The latest edition of the UK Housing Review, due to be published on 28 March, details how governance of the levelling up fund currently centralises power in UK departments in a process that lacks transparency and accountability. Devolution within England has been developing within one of the most centralised societies in Europe – it has been ad-hoc, evolutionary and undermined structurally by the post-2010 cuts to local government, and the role of housing should be defined more clearly. Improving the housing system is beneficial not only in terms of housing standards and affordability, but in helping to improve the UK’s poor economic performance.

The Review assesses the role of housing through the Levelling Up lens and raises concerns that there is no clear central strategy nor provision for the creation of strategies by the devolved administrations or areas covered by metro-mayors. Furthermore, there has been no attempt to resource sub-national jurisdictions to resource levelling up through block grants or by significantly expanding their own fiscal bases. The UK government’s willingness to date to become directly involved with devolved policy areas is sometimes called ‘muscular unionism’, and the Review highlights how the by-passing of devolved administrations is seen as undermining devolution. However, the new devolution deals announced in the Spring Budget are a serious step in the right direction for boosting regional growth and localising power, and there are said to be plans to negotiate new devolution deals across England which would include investment for areas committed to electing a mayor or leader.

On the question of land and property taxation, the UK Housing Review notes that the Levelling Up agenda is silent. This is key as the question unites the two parts of the housing and economy issue: the lack of tax mechanisms to discourage house-price inflation and the inadequate tax base for local governments with taxing property more comprehensively being one of the best methods of giving councils more resources, as the Northern Powerhouse is now advocating.

The current system of council tax and stamp duty clearly disadvantages poorer areas of the country. It is designed badly (the band multipliers favour owners of more valuable homes), the tax base has not been revalued in 30 years, and the way that a council’s tax base is calculated means that local government grant allocations are distributed unfairly. The Review looks at reform options over the short and longer term. The question is whether this or the next government will grasp the nettle and change what is a poorly designed and dysfunctional system. Such a reform would perhaps be the biggest contribution that could be made to a genuine ‘levelling up’ agenda.

The UK Housing Review 2023 will be launched in the House of Lords on 28 March. The Review is a CIH member benefit, and is free for members to download after its publication on 28 March 2023.

Here is the link to the CIH member-exclusive ‘what you need to know’ about the Spring Budget.

Written by Alexandra Gibson

Alexandra is a CIH policy and public affairs officer responsible for monitoring the impact of the Levelling Up agenda and leads on our public affairs and parliamentary engagement work to develop and maintain CIH's influence.