2004 SPENDING REVIEW

PN A4

12 July 2004

HOUSING AND SUSTAINABLE COMMUNITIES

The Office of the Deputy Prime Minister (ODPM) will receive increased resources of more than £1.3 billion over the Spending Review period (3.3 per cent growth a year in real terms) to deliver thriving, sustainable and inclusive communities, and tackle the nation’s shortage of housing, the Chancellor announced today.

In response to the Barker Review, funding will be provided for 10,000 new social housing units a year by 2007-08, and significant additional funding will be made available to target support for areas of low housing demand in parts of the North and Midlands. 

Deputy Prime Minister, John Prescott said:

"I welcome this substantial increase in investment. It will allow us to build on the Sustainable Communities Plan to increase housing supply in the growth areas, substantially expand social housing provision to help tackle homelessness and regenerate areas with a legacy of housing decline.  In doing so, we will protect the countryside and deliver the services and infrastructure needed for genuinely sustainable communities, which are safer, cleaner and greener.
In addition we will intensify action to reduce social exclusion and deprivation and narrow the gap in outcomes between deprived areas and the rest of the country.
This is an excellent outcome for delivering our aim of creating places where people want to live and promoting a better quality of life for all."

DETAILS

• Housing spending – including regional and local programmes – will be over £1.3 billion higher in 2007-08 than in 2004-05, equivalent to an annual average growth rate of 4.1% in real terms;
• There will be a 50 per cent increase in new social house building – an extra 10,000 homes a year to turn around the growth in homelessness;
• The affordability of housing will be improved with resources allocated to provide 200,000 additional homes in four growth areas, and going further to respond to new proposals for growth, including a new £150 million Community Infrastructure Fund by 2007-08 held by the Department for Transport.
• Substantial new investment to regenerate areas suffering from low housing demand enabling an expanded programme for the North and Midlands.
• A strengthened approach to improving outcomes in the most deprived areas through continued support for neighbourhood renewal of £525 million a year through to 2007-08.
• Increased funding to strengthen our counter terrorism capability and the continued modernisation of the Fire and Rescue Service.
• Measures to promote economic development in the regions through an increase in funding for Regional Development Agencies (RDAs).
• Efficiency savings within ODPM will realise at least £620 million by 2007-08 of which two-thirds can be released for front-line activities. 

In response to Kate Barker’s recommendations the Spending Review:

- funds the 200,000 additional houses set out in the Communities Plan by 2016 in four growth areas and provides resources to respond to further proposals for growth
- establishes a £150 million a year Community Infrastructure Fund in the Department for Transport
- funds a 50% increase in new social house building - an additional 10,000 new social housing units a year by 2007-08
- establishes market affordability as a long-term goal for housing supply enshrined within the PSA
- continues the Planning Delivery Grant to support the implementation of further planning reform.

The provision of new private and social housing will not be at the expense of the environment. As well as preserving or increasing the area of land designated as greenbelt and to raising the density of development to minimise land take, the Government is committed to at least 60% of new housing to be on previously developed ‘brownfield’ land. The Government is also committed to ensuring that new housing will be built to high standards in relation to energy and water efficiency, waste and building materials, taking into account the findings of the Sustainable Buildings Task Group.                                                                                                                                                        

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Office of the Deputy Prime Minister

£ million

           2005-06

2006-07

2007-08

Resource Budget¹

Of which Administration Budget

5,048

334

5,393

332

5,896

330

Capital Budget

2,428

2,471

2,518

Total Departmental Expenditure Limit2

7,460

7,836

8,377

Total housing3

6,408

6,651

7,211

1 The resource budget includes capital grants to the private sector, including Registered Social Landlords, classified as capital in National Accounts.

2 Full resource budgeting basis, net of depreciation.

3 Housing spend classified as regional policy consistent with international definitions from UN Classification of the Functions of Government (COFOG).  Actual outturns are subject to spending decisions by local authorities.

NOTES FOR EDITORS

1. The final report of the review undertaken by Kate Barker into housing supply, Building Stability: Securing Our Future Housing Needs, was published in March 2004 and is available  on this website .
2. The Government’s Sustainable Communities plan: Building for the Future was published in February 2003.
3. The four growth areas are:  the Thames Gateway; Milton Keynes/South Midlands; Ashford; and London –Stansted – Cambridge
4. The Sustainable Buildings Task Group published its report: Better Buildings – Better Lives in May 2004.
5. For media enquiries, please call HM Treasury press office on 020 7270 5283.

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2004 Spending Review index