Responding to Government investment plans

L&Q welcomes the commitment to further investment in affordable housing announced in October’s Comprehensive Spending Review but raises some concerns.

The Government confirmed plans originally set out in its Housing Green Paper for a big increase in affordable housing. It will invest £6.5 billion in social housing and £1.5 billion in low-cost homeownership over the next three years. There will also be changes to the planning system to help increase the level and speed of house building.

Group Chief Executive Don Wood said: “We welcome the Government’s commitment to increasing long-term housing supply and affordability. It has put housing right at the top of the agenda, and sets out ambitious targets and some new money, which is all good news. This represents a huge opportunity for L&Q to contribute to meeting housing need and create places where people want to live.”

However, the additional budget promised is to be spread more thinly, with smaller amounts for each home developed and housing associations expected to make greater financial contributions. This is part of a Government drive to make use of what it refers to as the “unused financial capacity” of housing associations.

Group Finance Director David Montague commented: “The increase in resources is clearly to be welcomed. However, with grant rates reducing, housing associations are being called on yet again to produce more for less. There does seem to be an assumption that associations have limitless financial capacity and can absorb increasing costs without limit.”

The 15 largest London housing associations, including L&Q, published a report earlier this year defending their right to keep control of their own financial surpluses. In the ‘Capital Finance’ report the G15 argues against suggestions that their surpluses, which are currently pumped into a range of vital community projects, should go entirely towards building new homes.

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