Burnham’s pivot to council housebuilding risks an immediate drop in delivery

When Labour came to power in July 2024, the housebuilding sector was initially excited. Then-chancellor Rachel Reeves’ plan for economic growth seemed to centre on facilitating development, with a commitment to deliver 1.5 million homes through planning reform and building on grey belt land.

The reality has been different. The wider economy and an increasingly costly regulatory burden stymied development and, two years later, the UK welcomed its seventh prime minister in 10 years, with a new cabinet, new ideas and new promises.

While these have brought a sense of renewed optimism to some extent, it all feels rather familiar. And while politicians have been busy with politics, the housing crisis has only got worse.

A recent piece of research we commissioned looking at the temporary accommodation crisis reveals a desperate need for an increase in the delivery of social housing. There are now 326,000 people, including 169,000 children, in temporary accommodation, costing local councils around £2.3bn a year.

This figure has almost doubled in five years, with London boroughs alone spending £4m per day. At the same time, despite efforts to unblock the planning system through the new National Planning Policy Framework and allocating more money to the Social and Affordable Housing Programme (SAHP), planning permissions have fallen to their lowest level for two decades.

The housing crisis is a long-term problem resulting from years of under-delivery and policy decisions with consequences that have accumulated over decades. This is at odds with the increasingly short-term world of politics: prime ministers do not have the luxury of time to prove themselves and, to ensure their survival, tend to be more focused on quick wins than long-term strategies. 

“The housing crisis is a long-term problem resulting from years of under-delivery….his is at odds with the increasingly short-term world of politics” 

Sir Keir Starmer’s £39bn SAHP created real positivity. His successor Andy Burnham clearly sees the need for a boost to social housebuilding and the recent announcement by Homes England of its £10bn grant programme (outside London) with 33 strategic partners is positive news.

However, it remains to be seen how providers will fare who are not strategic partners and who will rely on project-by-project grant approvals through Homes England’s Continuous Market Engagement process. 

Concerns are emerging of possible delays, frustrations and perhaps a significant cutback in housing association grant funding to make way for a much-touted new programme of council housebuilding

Across the country, thousands of social homes are ready to move forward through this route if funding approvals can be provided quickly and consistently. But concerns are emerging of possible delays, frustrations and perhaps a significant cutback in housing association grant funding to make way for a much-touted new programme of council housebuilding.

Housing associations and councils working together, for example through joint ventures using council-owned land, is compelling, but what is desperately needed is continuity. If the government wants to get as many new projects on site as quickly as possible, it needs to put practicalities ahead of rhetoric and approval ratings, prioritising routes that maximise the immediate delivery of social homes ready for occupation. Housing needs to be treated as long-term national infrastructure, with a stable policy environment that gives local authorities, housing providers and developers the confidence to plan and invest for the future. 

While councils have an important strategic role in shaping local housing delivery, the scale of the challenge means government must also maximise the capacity of housing associations and private-sector developers 

While the government attempts to pivot to direct provision by councils, many of which have not delivered homes for years and do not have the resources to do so, there is a huge risk of a significant and immediate reduction in delivery as other parties, who have sites ready to go, pause to take stock and understand where they fit within this new direction.

While councils have an important strategic role in shaping local housing delivery, the scale of the challenge means government must also maximise the capacity of housing associations and private-sector developers, which already have the delivery capability, development expertise and pipeline of projects required to bring forward new homes immediately. Any policy shift that sidelines them risks slowing delivery when the country can least afford it.

The reality is that housing cannot be fixed by one route and within a single parliamentary term. The last time a UK government served two or more terms was the Labour government between 1997 and 2010. Burnham’s commitment to a 10-year national plan and a renewed focus on housebuilding suggests a recognition that short political cycles cannot solve long-term structural problems. The real test, however, will be in whether the changes he introduces can succeed in bringing more schemes forward without stalling those that are already in the pipeline, and whether his policies will survive long enough to give delivery partners the confidence to act.

The thousands of families trapped in temporary accommodation, and the local authorities paying to house them, will be hoping they can.

Richard Cherry is executive chair at Stonebond