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SR2002/ODPM

15 July 2002

Tackling supply and demand for homes

Housing and planning received a major boost today, with increases of more than £1 billion in 2005-06 compared with 2002-03 announced by Chancellor Gordon Brown. Spending in these areas in 2005-06 will be £4.7 billion - £1.4 billion higher than today.

Much of the increase is to tackle the severe problem of housing supply and demand facing different regions in England. Additional investment for affordable housing to rent and own in London and the South East, together with reforms to assistance for key workers to gain greater employer involvement and funding, will enable a significant growth in provision. Meanwhile communities in areas afflicted by low housing demand will benefit from a new fund to begin to turn these markets around.

This investment is being supported by comprehensive institutional reforms to housing and planning, with the establishment of regional housing bodies that will bring together housing investment and planning and improve links with transport and economic development. There will also be a single inspectorate for social housing, opening up delivery of social housing to new forms of social landlord and radical changes to the land-use planning framework.

Welcoming the announcement, Deputy Prime Minister, John Prescott said:

"I welcome this additional funding to allow us to tackle the difficult problem of housing supply and demand across the different English regions. In particular, it will enable me to make a significant increase in investment for affordable housing to rent and own in London and the South East, complemented by greater employer contributions for key worker housing which will have a significant impact. Equally, areas blighted by low housing demand will benefit from a new fund to turn their problems around.

"Improvements to the planning systems are essential for sustainable development and for business. The new planning incentive grant will benefit those local authorities which improve their services most and quickly adopt our agenda to reform the planning system.

"Improvements to the supply of housing are being matched by measures to improve its quality. The ODPM will continue its work to meet its target to make all social housing decent by 2010. Furthermore, this target is now being extended to drive through improvements to conditions for vulnerable households in the private sector too."

Further investment in housing will be accompanied by a new target to achieve a better balance between housing availability and the demand for housing in all English regions while protecting valuable countryside around our towns, cities and the greenbelt. The Government will be seeking a greater density of development, ensuring that figures in Regional Planning Guidance are actually delivered, as well as driving forward growth areas for future housing development. This step change in delivery will be assisted by a new planning incentive grant, to deliver a major increase in the performance and quality of service of local planning authorities, plus extra money for the Planning Inspectorate to speed up planning appeals and planning inquiries.

Improvements to the supply of housing are being matched by measures to improve its quality. The settlement enables the Office of the Deputy Prime Minister (ODPM) to continue with its target to make all social housing decent by 2010 whilst expanding its commitment to encompass vulnerable households in private sector accommodation.

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The three-year spending plans for the Office of Deputy Prime Minister announced today will deliver:

  • A significant increase in investment by 2005-06 in affordable housing to rent or own in London and the South East.
  • Funding to implement the investment strategies being drawn up by nine low demand pathfinder projects that will turn around the problems blighting over 400,000 properties in their areas
  • A reduction in the number of social rented homes, which are private sector homes occupied by vulnerable groups, that fall below the decency standard. Decent homes that are warm and sound are an essential component of a healthy nation, especially for vulnerable households; the elderly, young or disabled
  • The new planning incentive grant will enable local planning authorities to improve the delivery of the planning system through recruiting, training, and retention of more planning officers, as well as training for councillors. Those who improve fastest will get the most extra resources and some grant will focus on those authorities under most pressure for development.

Notes for editors

1. The local government settlement is in press notice SR2002/LG.

2. The new ODPM spending plans provide for a total increase of 5.2% a year in real terms over the next three years, as compared to spend for this year.

£ million 2002-03 2003-04 2004-05 2005-06
Office of the Deputy Prime Minister
Resource Budget 4558 4726 5066 5310
Capital Budget 1491 2018 2183 2278
Total Departmental Expenditure Limit1 6030 6726 7230 7568
Housing
Funded by the department in DEL 3285 3987 4339 4588
Major Repairs Allowance in AME 1561 1473 1394 1312
Total housing (England) 4846 5460 5733 5900
Other ODPM 2745 2739 2891 2980
Near-cash spending in ODPM DEL2 5517 6167 6666 6998

1 Full resource budgeting basis, net of depreciation.
2 Consistent with previous control basis.

3. A decent home is one which is wind and weather tight, warm and has modern facilities. The definition of a decent home is based on the following four criteria:

  • It meets the current statutory minimum standard for housing.
  • It is in a reasonable state of repair.
  • It has reasonably modern facilities and services.
  • It provides a reasonable degree of thermal comfort.

4. The Government conducted a comprehensive review of public services - the Comprehensive Spending Review - in 1998. The 2000 Spending Review built on this by setting targets and allocating resources for the three years to 2003-04. The 2002 Spending Review revises these plans for 2003-04 and outlines new plans for 2004-05 and 2005-06.

5. For further details please contact the Press Office for the Office of the Deputy Prime Minister on 020 7944 3042; Out of hours: 07659 116934 or visit the ODPM website.

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2002 Spending Review Press Notices index page