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How will devolution affect the social housing sector?

First published in the March 2016 edition of 24Housing

From rent caps to right-to-buy, 2016 is shaping up to be a year of significant pressure for social housing providers. But another policy development - which is running alongside those that directly target the sector - may provide some welcome and positive opportunities. The move to devolve greater powers to city regions will likely open up new opportunities, facilitate more informed local decision making and relax some centralised restrictions to support the development and provision of social housing in the UK. 

The government's devolution programme gathered pace throughout 2015. Deals to devolve powers to city-regions like Greater Manchester, Merseyside, Greater Birmingham, Sheffield, the North East and counties like Cornwall have already been agreed; with more potentially in the pipeline. The Cities and Local Government Devolution Bill has now completed its journey through parliament – gaining Royal Assent this January – which will trigger the implementation of the agreed city deals and elections for the first metro mayors. 

Aside from the pace of developments, the government's devolution agenda is marked by its lack of prescriptive detail; allowing different powers to be devolved in different areas. This manifests in no two deals looking the same, including a range of powers open to city regions covering housing and transport to skills and healthcare. 

It is also marked by the limited engagement with organisations outside the circle of politicians and Local Enterprise Partnerships involved in negotiations so far. This is despite the potential impact on those operating within and across city regions. There is limited knowledge around what effect new powers will have, and the likely impact on activities in the future. Social housing providers should therefore be thinking about what contributions they can make to improve local decision making. 

One of the major announcements so far is the devolution of local health and social care budgets to Greater Manchester. Though the specifics are not yet clear, there is logic to devolved health powers, particularly for providers of supported housing. It should mean better joined-up thinking with social care, enabling services to be delivered closer to those that use them. Some believe this could boost the social housing sector, as local authorities gain more control of the decisions – and the budget to fund housing for the vulnerable. Local authorities are also better able to bring relevant local parties together to manage healthcare from acute treatment, through after care and support, to supported housing. 

But will further localised powers lead to an expansion in social housing? In principle, housing is an obvious policy area for devolution. Local authorities already have control of both the planning process and the development of their Local Plans. Further powers over housing provision and location could mean every section of the supply process - from development plan to delivery - would have local control. This presents a major shift in power and recognises how the London housing market faces different challenges to Manchester, and Manchester to the North East. Local authorities would therefore have control over the decision making process; but would need to negotiate a budget to build.

The prospect for devolved planning laws extends to strategic planning. As strategic planning covers developments such as transport and large housing projects, localised control has potential to boost the economy of city-regions through quicker and more informed decision making. Transport for Greater Manchester could have expanded its Metrolink tram system much quicker had it not faced difficulties over funding from national government, requiring the money to come from elsewhere. Combining desire with a devolved budget, this becomes a much smoother process – the success of the system proving local knowledge can be better targeted than those in Whitehall.

The conditions are certainly there for authorities to develop a sustainable social housing strategy as more powers are devolved to city regions. But how authorities use any devolved powers is perhaps the greatest question. Moving decisions from a national to local level does not guarantee quicker, better informed, decision making; housing providers will still be reliant on the expertise of decision makers to put these extra powers in place. But one thing is for sure, devolution provides the sector with the right conditions from which to start. Social housing providers should get in involved in the debate to ensure it does. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at March 2016. Specific advice should be sought for specific cases. For more information see our terms & conditions.

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