Local authorities have been advised to bolster relations with Homes England to ensure harmonious collaboration and efficiency in housing projects.
In a recent review, Homes England, the government's housing and regeneration agency, is proposed to undergo significant changes to improve its role in delivering affordable homes and supporting regeneration projects across the country.
The review, led by Tony Poulter, a non-executive director for the Department of Transport, suggests that Homes England should have closer relationships with local authorities to prioritize urgent projects and align funding flows with local needs. One of the key recommendations is to change Homes England's funding arrangements to allow it to commit to large, long-term schemes.
Peter Denton, chair of Homes England, acknowledges that some of the review's recommendations are already being implemented. He expresses a commitment to continuous improvement in Homes England's effectiveness and efficiency, stating that these changes could transform the way new homes are delivered and places are created.
The review also emphasizes refining funding formulas to better capture deprivation and housing need. Local authorities are encouraged to retain and efficiently spend Right to Buy receipts, which must be spent within five years on replacing sold homes through new build or acquisition. If not spent, the funds revert to Homes England or the Greater London Authority for affordable housing provision.
The review calls for revising funding allocation metrics to more accurately represent housing pressures and deprivation. For instance, London Councils highlighted flaws in the government’s planned funding reforms starting 2026-27, such as inappropriate deprivation measures that do not sufficiently capture high housing needs or homelessness in urban areas.
A tighter partnership between Homes England and local authorities could streamline deployment of funding, sharing of data on local housing demand, and joint planning. This may enhance the strategic targeting of funds, speed up housing delivery, and reduce bureaucratic delays. It might also ensure Homes England’s capital funding complements the receipts local authorities manage, maximizing replacement homes built.
However, alongside funding reforms, councils face expectations to raise council tax, which may impact local authority finances and their ability to invest in housing unless matched by capital support. The review also points out the risks of flawed funding mechanisms, such as applying equal weighting to unrelated deprivation indicators, which could hamper efforts to build sufficient affordable homes where needed most.
Michael Gove, in response to the review, endorses Homes England as the appropriate body to deliver more affordable homes and support regeneration plans across the country. Authorities have suggested that Homes England should be allowed to take more risks at certain points in the economic cycle to increase additionality and impact.
The review is part of the Cabinet Office's public bodies review programme, and the findings were published earlier in the week. An image credited to Ming Jun Tan accompanies this article.
[1] Local Government Association [2] London Councils [3] Government's housing and regeneration agency [4] Department for Levelling Up, Housing & Communities [5] Ministry of Housing, Communities and Local Government
- The Local Government Association, London Councils, and the Government's housing and regeneration agency could collaborate more closely, streamlining the deployment of funding, sharing of data, and joint planning, ensuring that capital funding complements the receipts local authorities manage, maximizing the number of replacement homes built.
- To align funding flows with local needs, Homes England is recommended to change its funding arrangements to allow for larger, long-term schemes, and refine funding formulas to better capture deprivation and housing need, as suggested by the review led by Tony Poulter.
- The Department for Levelling Up, Housing & Communities and the Ministry of Housing, Communities and Local Government should consider committing more capital support to local authorities, as they face expectations to raise council tax, which may impact their ability to invest in housing.
