Published: 25 Nov 2020 by Alastair Harper

The chancellor faced a lot of challenges with his Spending Review, especially if unemployment does reach 7.5% by the middle of next year. We are in an emergency economic situation, but we also need to know the causes predate the pandemic and consider what needs to be done to fix them. The government cannot now lose sight of the long term, and need to make sure they get the political, social and economic reward that would come from remembering the promise to build back better – and doing so with social homes. 

As the chancellor himself said, ‘For many people, the most powerful barometer of economic success is the change they see and how proud they feel in the places they call home.’ And he’s right. But without new funding for social homes, many families will be stuck without the secure home they desperately need.  

It feels a long time ago that the prime minister stood on a building site in the suburbs of Warrington with that promise to Build Back Better. It was early August and there was the hint of lockdown ending, the sun was out, and the country was coming out of hibernation. A V-shaped recession was what the government had their fingers crossed for, and some felt the economics looked promising for delivering it. The prime minister had already outlined that he was committed not just to defeating coronavirus (COVID-19) but using this crisis to tackle this country’s great unresolved challenges of the last three decades. The first example he used was building the homes the nation needed. It was the first attempt to look forward from the crisis world of lockdown and made clear the ambition for the government’s post-pandemic legacy. 

Since then, life has come at us fast, and this week’s Spending Review reflected that. We have run through second waves, tiers, new national lockdowns, and the PM has faced resignations, self-isolations and economic depressions. Even with the furlough scheme, over 300,000 people lost their jobs in the three months to September. Government has committed welcome help for workers with the furlough scheme’s extension, but it also needs to be acknowledged how many people are not getting that help. COVID-19 arrears are increasing as renters are unable to find work, and it is worrying that the Spending Review did not see an end to the benefit cap, and actually announced a real terms cut to LHA rates just when more so many people (4 in 10 of renters) are depending on their support. We look ahead to a winter where keeping people off the streets and safe in a home is going to be more urgent than ever. Government needs to deal with the crisis in front of them and that will mean spending more, not less, on welfare and homelessness than they thought they would need to in the summer. 

But the government must also remember the PM’s words in the summer and strive not only to tackle the challenges that have emerged in 2020, but also those that have built up over decades. There is clear evidence that poor housing has contributed to our health emergency. While news of vaccines offers hope that the pandemic may be defeated, for the longer-standing challenges, what is now needed is massive investment in the affordable, safe social homes this country just has not got enough of.  

That is why over 15 Conservative MPs wrote to the Prime Minister this week ahead of the Spending Review, calling citing the need for ‘a new ambition to rescue the housing sector through a commitment to replace current plans with something more ambitious to see us through the difficult next two years.’ As they said, an uncertain economic future is why we can’t miss the chance to level up through social housing. While not acting this week, the government should think back to the summer and what they knew then they needed to build. 

As well as the social impact this would have, it’s also just as important to consider what this investment would mean for the wider economy. The Chancellor has been openly acknowledging the need for investment to ensure the economy comes back. But controversies over who benefits from government expenditure will be at the front of people’s minds. Help for the few big businesses well insulated to the current shocks and those who like to make political donations will not be warmly received by the public at large. Our work, building on a report commissioned by Savills, has shown what a focus on social housing would mean for the economy – keep housebuilding going, contribute to the economy, support jobs in construction and the supply chain. 

Finally, doing this would not only bring safe homes for all across the country who need them, and make an economic recovery more likely –polling we did with YouGov also shows it makes political sense. While the poll showed that social housing was the most supported type of new build across the country, diving into the areas that have become known as the blue wall shows even greater support. Over half (51%) of voters in the North West said that building more social housing was the best way to tackle the national housing crisis. They wanted it more than any other type of tenure. Similar stories were seen in the polling in the North East, and Yorkshire and Humber. If the government wants these voters to know they are not forgotten, then they will give them the social stock they need. 

Elsewhere the government have shown they get it. This week the Greater London Authority promised to spend more than half of their new £4bn affordable housing budget on homes for social rent. Since this was signed off by MHCLG ministers, it is a welcome act of ambition that the rest of the country should get to appreciate. 

This week the chancellor promised to rebuild our towns and communities, but it is also politically, economically and socially vital that this government realises it will only keep its promise to build back better if they deliver social housing.