Housing, Communities and Local Government Committee
Tuesday 14th July 2026
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Speaker 1
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Speaker 1
Thank you for joining us this morning. Our session this morning is looking at everything MHC Mhclg, which is one of the biggest departments covering a span and breadth of many policy areas. Many key manifesto commitments for this labeling. MHC, Mhclg, which is one of the biggest departments covering a span and breadth of many policy areas. Many key manifesto commitments for this Labour government as well. So thank you very much for joining us this morning. Um, Louis, Delegated.
Thank you for joining us this morning. Our session this morning is looking at everything MHC, Mhclg, which is one of the biggest departments covering a span and breadth of many policy areas. Many key manifesto commitments for this Labour government as well. So thank you very much for joining us this morning. Um, Louis.
Thank you for joining us this morning. Our session this morning is looking at everything MHC, Mhclg, which is one of the biggest departments covering a span and breadth of many policy areas. Many key manifesto commitments for this Labour government as well. So thank you very much for joining us this morning. Um, Louis.
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Speaker 7
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Speaker 7
Um. The, I mean, there's a whole swathe of things that I think are really important in this as the chair was just saying, it's got the biggest legislative legislative programme of any government department, a very, very broad remit. And I feel that we've made progress in the ten months that I've been in the role. Uh, in a lot of those, in a lot of those areas. I mean, for the government, the priority is has been housing. Uh, and we've passed the planning and infrastructure bill, which when I came in, it was of course already in train, but we strengthened it.
To make, to make sure that we could drive house building faster. We've, we've got the NPF, um, changes. Which are due out imminently following the final consultation. We've got the London stimulus package as well after London, you know, four years ago, house building froze in London and it needed a stimulus to get it moving. Uh, again, we've got that just about ready to go. So we've opened and then closed bids for the first phase of the social Affordable Homes programme as well.
That's going to that's going to make a huge difference, particularly judging by the level of oversubscription to those bids. So house building, very, very important. Of course, the progress we wanted somewhat stalled by events in the Middle East, which have had a negative impact on investment and on, uh, costs as well. So that's very significant. Um, devolution and the place agenda. We've taken huge strides forward to get the English Devolution Community Empowerment Bill through Parliament, putting devolution by default, um, on the books now, um, statutory process for the right to request and the assumption that the government will concede to devolution, where mayoral authorities are coming forward with proposals for what should be devolved, the place agenda, which for me is a very important corollary of, of, of the structural devolution.
It's all well and good and very important to get powers out to the regions, but we need a much more directly accountable and responsive system, um, of public services and decision making directly to communities and public service users. So we've inserted that. That's of course a developing agenda that I think has much further to go. Right, right. The way across government and the important work we've been doing on social cohesion as well. You know, I was very pleased we got the social the social cohesion action plan, um, published and out.
It's a baseline. Uh, to be honest, there's a lot further to go. We all see in our constituencies the huge challenges that there are, uh, pulling communities apart at difficult, difficult times like this. Um, in terms of regrets, um, it would be the wish to have gone further and faster in all of those areas. But, you know, I don't know what's going to happen in the reshuffle next week any more than anyone else does. So maybe I will get that chance.
Maybe it will be one of my colleagues. We'll wait and see what happens.
To make, to make sure that we could drive house building faster. We've, we've got the NPF, um, changes. Which are due out imminently following the final consultation. We've got the London stimulus package as well after London, you know, four years ago, house building froze in London and it needed a stimulus to get it moving. Uh, again, we've got that just about ready to go. So we've opened and then closed bids for the first phase of the social Affordable Homes programme as well.
That's going to that's going to make a huge difference, particularly judging by the level of oversubscription to those bids. So house building, very, very important. Of course, the progress we wanted somewhat stalled by events in the Middle East, which have had a negative impact on investment and on, uh, costs as well. So that's very significant. Um, devolution and the place agenda. We've taken huge strides forward to get the English Devolution Community Empowerment Bill through Parliament, putting devolution by default, um, on the books now, um, statutory process for the right to request and the assumption that the government will concede to devolution, where mayoral authorities are coming forward with proposals for what should be devolved, the place agenda, which for me is a very important corollary of, of, of the structural devolution.
It's all well and good and very important to get powers out to the regions, but we need a much more directly accountable and responsive system, um, of public services and decision making directly to communities and public service users. So we've inserted that. That's of course a developing agenda that I think has much further to go. Right, right. The way across government and the important work we've been doing on social cohesion as well. You know, I was very pleased we got the social the social cohesion action plan, um, published and out.
It's a baseline. Uh, to be honest, there's a lot further to go. We all see in our constituencies the huge challenges that there are, uh, pulling communities apart at difficult, difficult times like this. Um, in terms of regrets, um, it would be the wish to have gone further and faster in all of those areas. But, you know, I don't know what's going to happen in the reshuffle next week any more than anyone else does. So maybe I will get that chance.
Maybe it will be one of my colleagues. We'll wait and see what happens.
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Speaker 4
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Speaker 4
And so, Secretary, thank you for that answer. You listed sort of a long list of what you call progress, rather than one single thing that you you said that you're proud of. Um, and then similarly, you were quite general with your answer in terms of sort of your biggest regret. You sort of led on housing as being the, the big issue that you and the department focused on in my constituents constituency of Woking, we've got 2000 properties with planning permission in the town centre alone, let alone the rest of the constituency.
Not a single one. 2000 properties have got planning permission. None have been built out, not a single one. The government isn't building what it said it would. Is that your biggest regret?
Not a single one. 2000 properties have got planning permission. None have been built out, not a single one. The government isn't building what it said it would. Is that your biggest regret?
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Speaker 7
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Speaker 7
Uh, it's not my biggest regret. I mean, there are a lot of factors influencing, uh, that which are outside the government's control. The, the impact of the Russian invasion of Ukraine, uh, the impact that had on materials availability and costs, uh, you know, wood, steel, cement bricks, a lot of those materials shot up dramatically. Um, and so did the cost of labour, particularly in London, where there was, there has been a shortage of labour for a period of time as well. So all of that has had an impact.
And then just as we saw in the spring statement, um, the economy starting to recover, we'd already had, I think by that point, six interest rate cuts in a row, which is a very important demand side, um, change, which makes people more confident to go out and buy. And then of course, the events in the Middle East and in Iran, which again, um, have put dramatic pressure on energy costs, which have further pushed up the costs of, uh, building. And stopped further anticipated interest rate cuts that were expected to happen through the course of this year.
So none of those things are the fault of the government, but the government is having to deal with those. So the fact that we've got, I think, just shy about 192,000 homes built in the time since the general. Sorry, 392. Uh, homes built since the time of the general election. And that was before all of the reforms I outlined before, to planning to regulation. And the London stimulus had had come through. And the London stimulus, of course, is taking cost out of the system.
The planning reforms, by speeding up the planning process and taking costs out of the system, uh, we're much more robust now with interventions in planning authorities that are not delivering the speed and quality of decision making. That is required to get house building to happen at the scale that we want. So I think mid June, there were nine interventions in one week in planning authorities. Very important to get the system moving as well. So I think we've done in the circumstances what we can do.
But of course we'd all want to see more happening. I think what's happened over the last four years is there will be a lot of pent up demand. People who would have moved haven't, for the reasons that I just outlined there. Partly confidence in, uh, in the system, but there will still be families that want to upsize to a bigger home, older people that may want to downsize to a different home, that demand is still there in the system. And I remain confident that with the reforms we've put in place, once the global economic circumstances stabilise, then there's the opportunity for this sector, the house building sector, the development sector to really motor.
And I picked that up from the developers as well. That's just not not just me saying that.
And then just as we saw in the spring statement, um, the economy starting to recover, we'd already had, I think by that point, six interest rate cuts in a row, which is a very important demand side, um, change, which makes people more confident to go out and buy. And then of course, the events in the Middle East and in Iran, which again, um, have put dramatic pressure on energy costs, which have further pushed up the costs of, uh, building. And stopped further anticipated interest rate cuts that were expected to happen through the course of this year.
So none of those things are the fault of the government, but the government is having to deal with those. So the fact that we've got, I think, just shy about 192,000 homes built in the time since the general. Sorry, 392. Uh, homes built since the time of the general election. And that was before all of the reforms I outlined before, to planning to regulation. And the London stimulus had had come through. And the London stimulus, of course, is taking cost out of the system.
The planning reforms, by speeding up the planning process and taking costs out of the system, uh, we're much more robust now with interventions in planning authorities that are not delivering the speed and quality of decision making. That is required to get house building to happen at the scale that we want. So I think mid June, there were nine interventions in one week in planning authorities. Very important to get the system moving as well. So I think we've done in the circumstances what we can do.
But of course we'd all want to see more happening. I think what's happened over the last four years is there will be a lot of pent up demand. People who would have moved haven't, for the reasons that I just outlined there. Partly confidence in, uh, in the system, but there will still be families that want to upsize to a bigger home, older people that may want to downsize to a different home, that demand is still there in the system. And I remain confident that with the reforms we've put in place, once the global economic circumstances stabilise, then there's the opportunity for this sector, the house building sector, the development sector to really motor.
And I picked that up from the developers as well. That's just not not just me saying that.
12:15
Speaker 1
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Speaker 1
Thank you, Secretary of State. All of us, as cross-party MPs, um, in our case book, we regularly refer constituents, private tenants, even sometimes landlords to the Housing Ombudsman and Housing Ombudsman is one of the key posts that you as Secretary of State will appoint. We were also supposed to be having a scrutiny hearing today for the government's preferred candidate. Why aren't we having that?We still don't. The government seem to not be able to find a candidate to take on this really important role?
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Speaker 7
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Speaker 7
Yeah, yeah. No, I agree with you with the importance of this. Now we all put great store by the role of the Housing Ombudsman in overseeing the different sectors, uh, of housing and making sure that there is an appropriate system to seek redress and change when things are going wrong. So it's very, very important. It's important, of course, that the government has the right candidate available. So rather than rush things through at a more desirable pace, um, the government is taking the time to get this right.
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Speaker 1
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Speaker 1
Through the appointment process started last June 2015. We then had another recruitment campaign at the start of this year, 15th of January. Just last week, we received a letter from Baroness Taylor to say that the process had been withdrawn. We have seen the government introduced a Renters Rights Act. We've seen government introduce Arabs, law asking residents, private tenants, landlords to apply to the Housing Ombudsman for redress to resolve disputes. How is that going to happen when there is no housing ombudsman?
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Speaker 7
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Speaker 7
Well, I mean, well, Richard Blakeway remains in post until the end of the month. We'll make appropriate interim arrangements following his departure. You know, I've known Richard Blakeway a long time. He was deputy mayor for housing back when I was a borough. Borough leader in London, a very competent. But he's completing the end of his second and final term now. We'll make appropriate interim arrangements, but we do want to make sure we appoint the right person who's able to carry that work forward, particularly with the expanded powers that the ombudsman is going to have.
So, you know, while it's regrettable, we haven't got a name for you to scrutinise now, I think it's more important to get it right.
So, you know, while it's regrettable, we haven't got a name for you to scrutinise now, I think it's more important to get it right.
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Speaker 7
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Speaker 7
No. It's more important to get it right than to rush it through when we don't think it is right at this stage, you know, Richard Blakeway has done a very important job overseeing the release of a nationwide complaint handling, uh, code. He's I mean, as I said earlier, he's long been a very powerful advocate for social housing. We'll make appropriate interim arrangements. You'll receive a letter from the relevant minister about that, and we will make an appointment. And that will be somebody that you can interview.
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Speaker 2
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Speaker 2
Chair and morning. The, um. The incoming Prime minister, uh, gave a wide ranging speech at the end of June. Um, with many aspects touching on Mhclg. Uh, you know, devolution, um. The, uh, good growth funds, housing first approach to homelessness, etc.. Um, so what's Mhclg been doing to prepare for the policies that, uh, Andy Burnham outlined in his speech in June?
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Speaker 7
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Speaker 7
Well, I've, uh, I've had a meeting with Andy Burnham where we talked through where we were up to on devolution and the development of the, uh, place agenda. Um, he's formulating his proposals for a number ten in the north of the north, um, and formulating exactly what will operate out of that, uh, out of that new centre. Um, it strikes me as a very sensible thing to put part of the operation in the north, particularly if it's going to be leading on devolution, but it will be for him to decide precisely what parts of number ten apparatus or operating out of Manchester and what will remain, uh, here in London.
And I'm sure he'll make proposals about that. But in terms of what we've done to support the transition beyond the meeting that I've had with him following that meeting, we provided his team with a series of briefing updates on areas of work around, um, the work of Mhclg. So not just devolution and place work, but also housing, social cohesion and the other areas that we're that we're responsible, that we're responsible for.
And I'm sure he'll make proposals about that. But in terms of what we've done to support the transition beyond the meeting that I've had with him following that meeting, we provided his team with a series of briefing updates on areas of work around, um, the work of Mhclg. So not just devolution and place work, but also housing, social cohesion and the other areas that we're that we're responsible, that we're responsible for.
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Speaker 2
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Speaker 2
Um, and then so moving on to the implications of the Labour leadership contest last week, Mr. Pennycook told the committee that the Cabinet Secretary guidance meant ministers could not or should not initiate new policy commitments. And that's why announcements across housing and leasehold policy are being held back. So, Secretary of State, can you confirm how many decisions in your department are now currently paused under that guidance?
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Speaker 7
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Speaker 7
Your specifically, it's areas where we would be initiating new policy or spending commitments. So, I mean, there's there's a number of areas where the incoming prime minister will want to take a view. Um, I've got some of them here. So announcements on high street funding, um, the overnight visitor levy where the, you know, consultation has been underway and we'll be completing um establishment of further announcement of further established mayoral strategic, um authorities. There are some aspects of leasehold reform that will be delayed for um for that.
I think those are the, those are the key ones. There are other smaller areas that I can write to you about if you'd like, if you'd want that.
I think those are the, those are the key ones. There are other smaller areas that I can write to you about if you'd like, if you'd want that.
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Speaker 1
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Speaker 1
Just on preparing for government, um Secretary of State, one of the key areas is um, a lot of legislation that was included in the King's Speech. Um, are you disappointed, um, like the committee that obviously the representation of people's bill was pulled. We still do not have the leasehold legislation laid before Parliament. Leasehold is an issue that comes up time and time again for many of our constituents. It's been covered by many news um organisations. You know, leaseholders have been waiting patiently for many years for this government to deal with it.
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Speaker 7
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Speaker 7
Yeah. Well, I think it's appropriate, um, in this kind of transitions, which we've seen fairly frequently over the last decade, um, that the incoming prime Minister should have a chance to look at significant reforms of that kind before they, um, they complete their journey through. So, you know, while of course I would have wished for this to all be completed before recess, um, I fully appreciate and understand and support the reasons that that can't, that, that can't now, that can't now happen. And regarding the representation of the people bill, which was due before the chamber today, we've got the Hillsborough bill coming forward.
That's also a very, very significant reform. And because of the limited time available before recess, both of them couldn't fit in. So given that the incoming Prime Minister deserves the chance to review that legislation, and in terms of scheduling, it will come back as soon as recess comes to an end. So it shouldn't inconvenience members particularly or indeed those many interested parties and stakeholders outside Parliament that want to see these things progress as quickly as possible.
That's also a very, very significant reform. And because of the limited time available before recess, both of them couldn't fit in. So given that the incoming Prime Minister deserves the chance to review that legislation, and in terms of scheduling, it will come back as soon as recess comes to an end. So it shouldn't inconvenience members particularly or indeed those many interested parties and stakeholders outside Parliament that want to see these things progress as quickly as possible.
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Speaker 1
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Speaker 1
One of the other things that we were promised was, um, there's a long standing leasehold valuation consultation linked to some of the work from the previous legislation. Under the last government, we were assured that we would get that before the summer recess. Would that still be the case?Secretary of state?
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Speaker 8
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Speaker 8
I don't know, I don't know, I'm afraid we can. We can write to you. I mean, I think as the Secretary of State has has said that on what goes forward and what is done under the new administration, obviously, there is an element of judgment to it, but it's a really important judgment. We both want to continue the business for this administration, uh, where things are collectively agreed already and there is spending allocated to a particular project. But it would be the wrong thing to do to bind the hands of a new administration.
If it is possible that they were going to take a different view. And that is a slightly uncomfortable place to be in trying to get that balance right, that judgment right. But that is what we're doing on a case by case and issue by issue, uh, basis, and trying to navigate through in the best way that we can.
If it is possible that they were going to take a different view. And that is a slightly uncomfortable place to be in trying to get that balance right, that judgment right. But that is what we're doing on a case by case and issue by issue, uh, basis, and trying to navigate through in the best way that we can.
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Speaker 4
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Speaker 4
One of the points that Lee made, um, kind of reflecting on your time in office. It's a very big department. You've been putting lots of legislation through. Do you think there's an argument for as many people have argued, and particularly given the agenda of the next government splitting the department in two um.
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Speaker 7
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Speaker 7
I may have a view. Um, I mean, you know, when I was running a county council, um, you can in the same way, cut and slice departments in different ways. My experience of both doing that and then not doing that, um, is that sometimes structural change can slow things down. Sometimes it helps bring things together that will drive change faster. The key is to get the best possible people into the jobs and make them operate collaboratively as a team. That was my experience.
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Speaker 4
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Speaker 4
Thanks. And look, we'll touched on the housing numbers, the housing numbers that we've delivered so far in this Parliament are nowhere near where we would like them to be, and running short of where we need to get to in order to build the 1.5 million homes. Um, now, I think all of us accept that there are many reasons for that, most of which are outside your control or the government's control. However, given those challenges, looking back in hindsight, is there more things you wish you had done in order to against difficult headwinds?Get those housing numbers up?
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Speaker 7
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Speaker 7
The NPF, of course, is only just coming through its consultation. I wish the consultation had been quicker, uh, because, you know, if we could have had those reforms available and in operation back in February, for instance, that would have given the sector more time to, uh, to work with them. So I think it is worth looking at the pace and speed with which consultations like that take place, but that is a requirement placed on us, not a decision of the department. But in terms of, you know, when I'm talking to the sector, when this government came in, the big issue was planning reform, legislation and regulations.
They were an absolute barrier, completely out of line with other comparable economies in the Western world. And any developer you spoke to, and I'd had a lot of engagement with developers back from my time when I was a council leader, but also co-chair of the Vauxhall Nine Elms Battersea Regeneration Partnership. They would all tell you that it was the planning system that was the problem. The Planning and Infrastructure Act and the Nppf changes have cleared that out of the way. Planning is no longer the big barrier that it used to be.
This government should be very, very proud and all of us about the changes that we've made through that. It had more or less cross-party support as well.
They were an absolute barrier, completely out of line with other comparable economies in the Western world. And any developer you spoke to, and I'd had a lot of engagement with developers back from my time when I was a council leader, but also co-chair of the Vauxhall Nine Elms Battersea Regeneration Partnership. They would all tell you that it was the planning system that was the problem. The Planning and Infrastructure Act and the Nppf changes have cleared that out of the way. Planning is no longer the big barrier that it used to be.
This government should be very, very proud and all of us about the changes that we've made through that. It had more or less cross-party support as well.
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Speaker 7
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Speaker 7
The issue now is much more viability. Yeah. So, so, so and a lot of those viability factors are things that have happened overseas, outside our control. The Russian invasion of Ukraine, the, uh, the, the war happening in Iran. Uh, and, and, and the, the gulf at the moment and the impact that's put on, uh, energy prices, availability of materials, investor confidence as well. Those are the things holding us back. So, uh, we strengthened aspects of the NPF and the Planning and Infrastructure Act in anticipation of these things, causing problems of the kind that they have.
And in London, where there was a particular problem for housebuilding and development, we have the London package that I agreed with, Sadiq Khan, which strips a lot of cost out of the system in order to make schemes more viable and getting and get them moving again. So where I think I wish we'd done more, I wish it could have been done quicker, but. But that wasn't the fault of the department. It was processes the department is required to follow. Um, if there's an opportunity to review those, I would definitely want to review them.
And in London, where there was a particular problem for housebuilding and development, we have the London package that I agreed with, Sadiq Khan, which strips a lot of cost out of the system in order to make schemes more viable and getting and get them moving again. So where I think I wish we'd done more, I wish it could have been done quicker, but. But that wasn't the fault of the department. It was processes the department is required to follow. Um, if there's an opportunity to review those, I would definitely want to review them.
12:31
Speaker 8
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Speaker 8
Could I, could I add a couple of brief things I think on that, because it's a fair line of questioning on planning. I mean, the the first thing I think is the return of compulsory housing targets in councils like massive step forward. The second thing is the designation of the grey belt and the first issuance of the NPF. Now we see already that 80% of appeals on grey belt are successful for major development. The third major reform is the national scheme of delegation.
So making sure that if you're doing a kitchen extension that doesn't need to go to councillors, officers can approve that routinely anyway. And whilst and whilst I just. And and whilst it's a it's you know it'd be good to get the new iteration of the NPF out. You'll have seen from the consultation that some of the intention around um being more prescriptive and default yeses for development around stations has the potential to be really quite significant. And, you know, any new administration will want to come to that very quickly.
So I do think there was some, some big bold changes in a relatively short period of time on the planning.
So making sure that if you're doing a kitchen extension that doesn't need to go to councillors, officers can approve that routinely anyway. And whilst and whilst I just. And and whilst it's a it's you know it'd be good to get the new iteration of the NPF out. You'll have seen from the consultation that some of the intention around um being more prescriptive and default yeses for development around stations has the potential to be really quite significant. And, you know, any new administration will want to come to that very quickly.
So I do think there was some, some big bold changes in a relatively short period of time on the planning.
12:32
Speaker 7
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Speaker 7
The BSR run rate as well. You know, last summer it was 11 months for applications. Today it's about 13 weeks. That is dramatically better. And it's taken a lot of cost. Play, uh, out of the system and uncertainty for developers. You know, we're also exploring, um, early stages. I've been taking advice from the department on this, the opportunity of establishing a state house builder, uh, and whether that would be something that would help us get through, you know, in the housing sector, you see it over many years.
It has peaks and it has troughs. But a state house builder might help us get through some of the troughs. Um, keep the sector moving. So the private sector, the market sector on which the sector heavily relies would be in a better state once we come through those dips. I think there's more work to do on that.
It has peaks and it has troughs. But a state house builder might help us get through some of the troughs. Um, keep the sector moving. So the private sector, the market sector on which the sector heavily relies would be in a better state once we come through those dips. I think there's more work to do on that.
12:33
Speaker 4
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Speaker 4
So um I think I mean broadly speaking summarize your view would be we've got the balance right on planning changes. We wish we'd done them quicker. Let's talk about speed for a minute. Because obviously one of the things that we want to deliver as a government, I think we should be very proud of, is more new towns. Yeah, I was looking back, uh, when we did Harlow New Towns Act passed 1946, construction master plan was done. 1947. Construction started in 1948.
That was the pace through which we did projects like this in the 1940s, we announced we were going to do new towns. A year and a half out from the election. We then did a report which spent 18 months, as far as I can see, drawing 12 crosses in on the map, which I'm reasonably confident you get some smart people in the room. They probably could have done it in an afternoon. The government then spent six months coming up with a response to that.
It's now doing a consultation on whether its response was correct. And there's now talk that maybe that consultation is going to have to be rerun, because the first consultation wasn't necessarily done. Um, in a way that rules out the chance of judicial review. Sort of bigger machinery of government. Question how do you move closer?Not necessarily completely back to that decision making of 1940s, but to that pace of delivery that we got in the 1940s on projects like this, rather than two and a half years and not a single brick being laid, which is well.
That was the pace through which we did projects like this in the 1940s, we announced we were going to do new towns. A year and a half out from the election. We then did a report which spent 18 months, as far as I can see, drawing 12 crosses in on the map, which I'm reasonably confident you get some smart people in the room. They probably could have done it in an afternoon. The government then spent six months coming up with a response to that.
It's now doing a consultation on whether its response was correct. And there's now talk that maybe that consultation is going to have to be rerun, because the first consultation wasn't necessarily done. Um, in a way that rules out the chance of judicial review. Sort of bigger machinery of government. Question how do you move closer?Not necessarily completely back to that decision making of 1940s, but to that pace of delivery that we got in the 1940s on projects like this, rather than two and a half years and not a single brick being laid, which is well.
12:35
Speaker 7
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Speaker 7
You're right, Chris, that that is a bigger machinery of, of government issue rather than something that relates only to MH CLG. But, but you saw how the proposed new towns under the Brown administration didn't go ahead because the consultation process wasn't followed. Therefore, they got delayed and delayed. And in the end, they, they didn't happen. Uh, so we, I was given legal advice throughout this process about the risks of the same thing happening again. So we had to follow a process which is not defined by Mhclg in order that these new towns could get the chance to go ahead.
But I, I share your frustration, um, at how slow and how cumbersome, uh, those, those consultation processes were.
But I, I share your frustration, um, at how slow and how cumbersome, uh, those, those consultation processes were.
12:35
Speaker 4
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Speaker 4
Who is it defined by?Because it seems like, you know, there's lots of select committees right across this place which have constant meetings where we get reported back, how frustrated everybody is by the consultation process that they're being instructed to do by some higher power. Who is this higher power, and how do we get them to change.
12:36
12:36
12:36
Speaker 7
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Speaker 7
Well, I think we should get as many barriers out of the way as we possibly can. You know, in you know, in the case I was referring to with the new towns proposed under the Brown government, it was environmental legislation that was that was the cause of those delays. But I've never seen, uh, house building and development as an either or with nature. You know, over over recent decades under the previous government, we saw house building and development in decline and nature in decline.
So it wasn't either or. Both were in decline. And I think some of the nature reforms that this government has already made, the, um, the environmental improvement plans, the, the, the land use framework, uh, the Nature restoration fund means that we can now get investment into nature and ecosystems across whole landscapes and expect to see an improvement in nature alongside getting ahead and building more quickly so that we get the homes that we need to see. So I think it could be a win win, and we should be able to do both.
But is there scope for further reform of the legislation?Yes there is. Well.
So it wasn't either or. Both were in decline. And I think some of the nature reforms that this government has already made, the, um, the environmental improvement plans, the, the, the land use framework, uh, the Nature restoration fund means that we can now get investment into nature and ecosystems across whole landscapes and expect to see an improvement in nature alongside getting ahead and building more quickly so that we get the homes that we need to see. So I think it could be a win win, and we should be able to do both.
But is there scope for further reform of the legislation?Yes there is. Well.
12:37
12:37
Speaker 7
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Speaker 7
That's a consultation, as I think there aren't decisions and it's quite legitimate to go out and consult and seek views on something. But the intention of all our reforms is to increase the volume of social and affordable homes across the system. So including in the um, I'll give you the example of the London stimulus package that I agreed with the Mayor of London, where we reduced the requirement in new developments for affordability from 35%. I think it was down to 20% with a clawback mechanism.
If the market increases. The reason for that is you had a flatlining system and almost no new social homes being built in London for several years. So 35% of nothing is nothing. Uh, viability, rather than planning is now the barrier. So if you make schemes more viable, 20% of something is more social and affordable homes than 35% of nothing. So we did it for that reason. But we built in a very strong clawback mechanism. So if the market recovers and if developers then are making more profit when they bring those homes to market than they anticipated at the point where the consent was, was agreed, then more money would be taken and ploughed straight back into more social housing.
So the point is, we can all sit there and look at spreadsheets that say, we're going to build loads more social and council homes when we build zero are much rather have real homes than numbers on a spreadsheet.
If the market increases. The reason for that is you had a flatlining system and almost no new social homes being built in London for several years. So 35% of nothing is nothing. Uh, viability, rather than planning is now the barrier. So if you make schemes more viable, 20% of something is more social and affordable homes than 35% of nothing. So we did it for that reason. But we built in a very strong clawback mechanism. So if the market recovers and if developers then are making more profit when they bring those homes to market than they anticipated at the point where the consent was, was agreed, then more money would be taken and ploughed straight back into more social housing.
So the point is, we can all sit there and look at spreadsheets that say, we're going to build loads more social and council homes when we build zero are much rather have real homes than numbers on a spreadsheet.
12:39
12:39
Speaker 7
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Speaker 7
Lists for exactly the same, exactly the same reasons. You know, we've opened the social and Affordable Homes programme for bids in February. It was it closed in April. It was heavily oversubscribed. Um, that's really encouraging because it shows you that the sector's ready to go. That's going to create the biggest increase in social and council housing in a generation. Last year we built more new council homes in one year than in any other single year.
For 40 years, when records first began on that. So this government is already building record numbers of council homes in the social housing bill. We're reforming Right to buy so that the new council homes that councils and others will be building will not be immediately open to a right to buy. And being brought out of the system, which is a huge deterrent on those council homes getting built. So, um, I don't agree with your starting point that the government is reducing the amount of council housing being built.
We're not just increasing it. We're already seeing numbers that we've never seen built in a generation, and that will continue through the years to come.
For 40 years, when records first began on that. So this government is already building record numbers of council homes in the social housing bill. We're reforming Right to buy so that the new council homes that councils and others will be building will not be immediately open to a right to buy. And being brought out of the system, which is a huge deterrent on those council homes getting built. So, um, I don't agree with your starting point that the government is reducing the amount of council housing being built.
We're not just increasing it. We're already seeing numbers that we've never seen built in a generation, and that will continue through the years to come.
12:41
Speaker 7
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Speaker 7
Well, it's with the consultation is only just concluding, isn't it?So again, we have to wait and see when that comes through. But if. Speak, if you speak to developers, they will tell you the, the, the. Benefits from that will start to see more homes getting built. We've had the hit from incidents in the war in the Middle East that has affected energy prices. That has caused a bit more drag in the system, but I speak to developers frequently, both individually and collectively, to talk about what more the government can be doing to make sure that we have the right context to get the homes built, that this country desperately needs.
They're very confident about it working.
They're very confident about it working.
12:41
12:42
12:42
12:42
Speaker 6
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Speaker 6
You've sat here this morning and given a number of responses. I've spoken to developers. They've asked for this. We've delivered that. You haven't said, well, I spoke to councils or I spoke to local communities and they said what they really want when they when they get your force development is, is more infrastructure. So what has your department done to make sure communities like mine in Broxbourne get the infrastructure that they need to cope with all of the new development that you're forcing upon us?
12:43
Speaker 7
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Speaker 7
Well, if you want to know if I've spoken to council leaders, you just ask if I've spoken to council leaders and I'll tell you that, yes, I have, uh, just in the same way collectively, individually at the LGA, regularly, uh, in meetings in the department and very often that will focus on housebuilding as well. I do a lot of visits out to housing development sites, often accompanied by councillors or the council leader as well. And we recently up in York with the council leader, they're looking at that huge development they've got right in the city centre, which has got a vast amount of development, including housing and including social housing being built there.
And yes, they will talk about the need for infrastructure in order to enable those homes to go forward. Well, that is the role of Homes England, who are working with those areas to make sure infrastructure, particularly like road access and public transport to those areas, is in place. Um, some of the changes we're making in the nppf, like a yes by default around train stations where the public transport infrastructure is already in place. Those are such obvious places to get building. We anticipate that around London about a million new homes could be built around existing railway stations, where land is available to develop on.
And nationally, 1.8 million homes. So Homes England working with that, we've got the National Housing Bank established now that people can access through that, developers can access through that, um, up to £16 billion of investment, leveraging over £50 billion further of private investment in the infrastructure to enable housing to go ahead. So the government has done a lot on that.
And yes, they will talk about the need for infrastructure in order to enable those homes to go forward. Well, that is the role of Homes England, who are working with those areas to make sure infrastructure, particularly like road access and public transport to those areas, is in place. Um, some of the changes we're making in the nppf, like a yes by default around train stations where the public transport infrastructure is already in place. Those are such obvious places to get building. We anticipate that around London about a million new homes could be built around existing railway stations, where land is available to develop on.
And nationally, 1.8 million homes. So Homes England working with that, we've got the National Housing Bank established now that people can access through that, developers can access through that, um, up to £16 billion of investment, leveraging over £50 billion further of private investment in the infrastructure to enable housing to go ahead. So the government has done a lot on that.
12:44
Speaker 6
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Speaker 6
Where do you say where you say you're building around train stations or making it easier for default?Yes. So are these new train stations that are getting all of this development going to have extra trains an hour longer trains, because not everyone that will live in these properties next to that train station will actually use the train station.
12:44
Speaker 7
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Speaker 7
Well, that will that will be something that gets determined by the relevant transport companies and authorities as the homes get, as the homes get built, as transport for London is doing with some of the developments out in southwest, uh, southwest London, they're looking at increasing the train frequency as the population increases. But the key thing is you can't increase the frequency of the trains if there's no train track and there's no train station in place already. And in these cases, there are. So they make very, very sensible places to go ahead and develop, because you don't have to wait for the infrastructure to be in place because it's already there.
12:44
12:44
12:45
Speaker 8
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Speaker 8
I'm just I can confirm because I'm in quite a lot of meetings. The Secretary doesn't an awful lot of time with councils and community groups, and the department does as a whole as you would expect us to. But yes, clearly where there are more homes being built and that has implications for every other aspect of public services. And we understand that completely. So when the Department, Department for transport does an analysis of how many trains on a particular route, uh, housing supply and the amount of residents, there will be a key factor.
The same is true when the Department of Health will look at GP surgeries, for example, which we know is another massive thing when it comes to new developments. Only through the ordinary business of government, those changes are taken into account and factored into how decisions are made.
The same is true when the Department of Health will look at GP surgeries, for example, which we know is another massive thing when it comes to new developments. Only through the ordinary business of government, those changes are taken into account and factored into how decisions are made.
12:45
12:45
Speaker 3
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Speaker 3
Thanks, chair. Secretary of state, you obviously have famously talked about build, baby build, and I wonder whether we have got the balance wrong when it comes to new build housing and housing regeneration, because I represent a constituency where there are nearly 2000 empty properties in the town centre, a town centre being hollowed out, seeing new estates being built, donating um, the constituency yet leaving the town centre to basically disintegrate. Do we not need to be thinking about more regeneration in town centres to meet our housing needs, rather than the constant build build, build approach.
12:46
Speaker 7
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Speaker 7
We need?Both is the truth of it. You know, we came into power and inherited a housing crisis. You know, the number of people sleeping rough on the streets have doubled since 2010. Under the previous government, the number of families living in temporary accommodation, often for years. Very difficult to call it temporary when you're stuck in it for 3 or 4 years or more. Um, that had doubled as well. And young people, um, denied the opportunity that I had in my 20s to find somewhere I could afford to rent.
Or in my 30s, the first flat that I could afford to buy. And they see their life chances as not as good as their parents because of that. Um, we have a very significant undersupply of housing. Um, that can't just be met through remediation. Um, although that is certainly an area that we need to focus on as well, because existing properties that can be made, uh, appropriate for. People to, to live in is, is an important part of increasing housing supply in a sustainable way.
But we need to build more homes as well. The, you know, the changes that we've had, uh, demographically in our country, particularly with households, um, becoming smaller over time, you know, happily more people living longer. Um, so that has put significant pressure on housing supply and we have to address it through all the means available to us. But you can't do it just through remediation.
Or in my 30s, the first flat that I could afford to buy. And they see their life chances as not as good as their parents because of that. Um, we have a very significant undersupply of housing. Um, that can't just be met through remediation. Um, although that is certainly an area that we need to focus on as well, because existing properties that can be made, uh, appropriate for. People to, to live in is, is an important part of increasing housing supply in a sustainable way.
But we need to build more homes as well. The, you know, the changes that we've had, uh, demographically in our country, particularly with households, um, becoming smaller over time, you know, happily more people living longer. Um, so that has put significant pressure on housing supply and we have to address it through all the means available to us. But you can't do it just through remediation.
12:47
Speaker 3
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Speaker 3
No, I wouldn't suggest that you could. But at the same time, there's an incentive for local authorities to build on the outskirts of their town because it increases their revenue. And I wonder whether the department needs to think more about how it incentivizes councils to actually look after their town centres and regenerate those town centres, because ultimately, if you are a collection of estates surrounding a town centre that is dead, that's not really the aim of the department. I would imagine.
12:48
Speaker 8
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Speaker 8
Um, I think that's I think that's a, it's a, it's a fair, very fair question. And we are doing quite a lot of work on how we can incentivise um regeneration of the high street and replace it with housing, because the high street isn't coming back. I don't think to its former glory, it will be smaller than it perhaps once was because we're all shopping online. I think actually I'd be interested in your your views. One of the reasons it's still cheaper for developers to build out of town than it is to remediate.
So we should look at the full force of policy options that we can do to incentivise town centre redevelopment. We've made quite a lot of progress in the planning system in terms of changes of class use. Now that is much easier. I think high street rental auctions are potentially a very good policy. We need to do more on the public sector estate coming into the town centre by default, but I sort of share your ambition. It is something that we are looking at, but I think there are financial and viability challenges to overcome as well, but definitely want to do more in this space.
So we should look at the full force of policy options that we can do to incentivise town centre redevelopment. We've made quite a lot of progress in the planning system in terms of changes of class use. Now that is much easier. I think high street rental auctions are potentially a very good policy. We need to do more on the public sector estate coming into the town centre by default, but I sort of share your ambition. It is something that we are looking at, but I think there are financial and viability challenges to overcome as well, but definitely want to do more in this space.
12:49
Speaker 3
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Speaker 3
I think I would just say finally, I think the challenge fundamentally is the private housing stock. And oftentimes private rented landlords being perfectly comfortable to essentially land bank their stock in a town centre and leave it empty with local authorities with very little meaningful power to take over that in terms of compulsory purchase or anything else, which is a long, drawn out and very expensive for local authority process, it needs to be far more simple to get those properties out of the hands of those those, those individuals.
12:49
12:49
12:50
12:50
12:50
12:50
12:51
Speaker 4
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Speaker 4
Very briefly, just touch you mentioned in a previous answer about the department looking at, uh, introducing a new national housebuilder, which I think is interesting, innovative idea, which I think many people think is going to be necessary to disrupt the kind of broken market that the CMA have identified with housebuilding. Is there any more you want to share on what that thinking is, or you know, where you're at and how you might go about doing.
12:51
Speaker 7
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Speaker 7
Such a thing?We're currently taking advice on it. So I mean, the, the, the, the idea is how do you try and smooth out the peaks and troughs in this sector, which when you get a deep trough, which we've had recently because of, uh, the events overseas that I won't, I won't repeat those again. It then makes it very difficult to come out of it because we lack the skills. For instance, we lack the investment to make it move quickly. If you had a national housebuilder, could we smooth that system and make housebuilding happen faster?Um, and stimulate the private sector, which is always going to be, you know, the main volume builder, uh, on based on the model that we have in have in this country, uh, for recent decades.
So we're looking at all the options around that.
So we're looking at all the options around that.
12:51
Speaker 4
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Speaker 4
Yeah. The one other element of this, which we haven't touched on is we don't have some sort of, um, demand side stimulus at the moment. There's a broad agreement that help to buy. Um, didn't, didn't necessarily achieve the policy aims or wasn't efficient enough. Do you think it's time to look at a new demand side stimulus or in particular, do you think it's worth looking at one that could help fix that boom and bust problem that you identified in your previous?
12:52
Speaker 7
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Speaker 7
We keep all of these options under review constantly, and we have conversations with the Treasury about about this, the, the significant reductions that we've had in interest rates, uh, since the general election, um, have helped massively, uh, on the, on the demand side. And in fact, before the most recent, um, recent incidents, the war in the Middle East, we had record numbers of mortgage products available from mortgage lenders. And that that was because they were anticipating that the changes that had already happened were going to stimulate more demand.
Um, unfortunately, um, the, you know, the, the invasion of Iran and the events that that led to, uh, in, in the Gulf and the impact on energy prices and supply of materials has had a detrimental effect that has counterbalanced that we all hope that that situation can be brought to a conclusion as quickly as possible, because the beneficial circumstances that we had in place will, um, will be able to come back. Uh, we can then take a view about what is required, uh, in terms of, further stimulating demand. If you look at help to buy, um, it's certainly increased demand, but it looks like because it wasn't targeted, that it inflated prices in some areas, which counteracted the benefit of the initiative in the first place.
So there's no point, um, taking action, uh, if it doesn't lead to any meaningful change in the end, uh, about the affordability or availability of housing. And I think to some extent, that's what happened with help to buy. Um, so it would need to be different to that, but we keep it under review, but there aren't any decisions at the moment about what that needs to look like.
Um, unfortunately, um, the, you know, the, the invasion of Iran and the events that that led to, uh, in, in the Gulf and the impact on energy prices and supply of materials has had a detrimental effect that has counterbalanced that we all hope that that situation can be brought to a conclusion as quickly as possible, because the beneficial circumstances that we had in place will, um, will be able to come back. Uh, we can then take a view about what is required, uh, in terms of, further stimulating demand. If you look at help to buy, um, it's certainly increased demand, but it looks like because it wasn't targeted, that it inflated prices in some areas, which counteracted the benefit of the initiative in the first place.
So there's no point, um, taking action, uh, if it doesn't lead to any meaningful change in the end, uh, about the affordability or availability of housing. And I think to some extent, that's what happened with help to buy. Um, so it would need to be different to that, but we keep it under review, but there aren't any decisions at the moment about what that needs to look like.
12:53
12:53
12:53
Speaker 7
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Speaker 7
Well, the Pride in Place programme is a very important initiative for this government's £5.8 billion, targeted at 284 of the poorest areas, as defined by the Index of Multiple Deprivation, and those areas getting, uh, up to £20 million each over a ten year period, with decisions about how that money is invested, taken by the local community through a neighbourhood board, independently chaired, engaging with local people, uh, about what, what they want, about what they want to see in terms of measuring success. It will be through, um, metrics like, um, strengthening social cohesion, improving access to opportunities, including in employment outcomes, reducing the number of people who are not in employment, education or training, um, in those localities, but because it's local boards who are taking the decisions about what they want to invest in based on their assessment of the challenges facing their localities.
It's going to vary from area to area in terms of what they're seeking to tackle.
It's going to vary from area to area in terms of what they're seeking to tackle.
12:54
12:54
Speaker 8
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Speaker 8
Can I just ask?And we will. I mean, this is obviously right. I would just add we will do a formal evaluation of the programme as well. Um, but it's a ten year programme doing a proper evaluations in local growth is hard because you are always trying to prove a counterfactual. And what is the other prevailing winds. But in answer to your question, straight answer to your straight question, yes, we will do an evaluation of the programme.
Um.
Um.
12:54
Speaker 5
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Speaker 5
I find it slightly surprising that you're suggesting that this £20 million, which we also have to be honest, is money that could have been it wasn't all new money. It was taken out of other existing funding programmes in order to create that opportunity. But that £20 million in an area over ten years will actually have a significant impact on local growth. It might be able to help something like tackling the neat numbers. If the board decide on an evidence based approach to implement evidence backed approach, you know, neat reduction approaches.
I have not, in my experience so far, both with a board and attending sessions with other boards and other chairs, got the sense that that is how these boards are likely to be operating. So do you honestly believe that there's going to be clear sense of accountability?How is the government going to understand whether this money is actually making a difference in these local areas?And what can you measure over the ten years?Because you cannot wait for ten years to evaluate it and then decide whether it's worked or not?
I have not, in my experience so far, both with a board and attending sessions with other boards and other chairs, got the sense that that is how these boards are likely to be operating. So do you honestly believe that there's going to be clear sense of accountability?How is the government going to understand whether this money is actually making a difference in these local areas?And what can you measure over the ten years?Because you cannot wait for ten years to evaluate it and then decide whether it's worked or not?
12:55
Speaker 7
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Speaker 7
Well, we've got this community development unit in the department that is conducting ongoing monitoring of both the decision making and the communities are being appropriately engaged and monitoring, um, the, the outcomes and the outputs from that work and that will be developing, that will be developing over time. So that's how the monitoring is happening. But if the government had come forward and said, here's the money for your um locality, we want this to be done differently because we want local communities to decide for themselves what they want to spend it on.
The insight being local people know best what needs to change in their own community, and then had imposed the outcomes it expected to see. Then it wouldn't be operating as something which is not locally controlled. And I think at a time when you've got a huge breakdown in trust in politics, partly because of the deep regional economic inequalities that we see and the economic inequalities within communities, and the serial failure of big promises from governments. You know, austerity was meant to fix the problems.
It didn't. Brexit was meant to fix the problems. It didn't. Levelling up was meant to fix the problems. It didn't. Uh, another top down imposed agenda just wasn't going to work. And you can rebuild trust by showing that politicians trust people, but you've got to not overly constrain them. Of course, you have to monitor, uh, what's taking place. Of course, you need to be able to demonstrate value for money in the way that money is being used.
But if you impose strictures right from the front, you're not giving power to those communities. And that is something that is essential to this programme and why it's so different from previous programmes.
The insight being local people know best what needs to change in their own community, and then had imposed the outcomes it expected to see. Then it wouldn't be operating as something which is not locally controlled. And I think at a time when you've got a huge breakdown in trust in politics, partly because of the deep regional economic inequalities that we see and the economic inequalities within communities, and the serial failure of big promises from governments. You know, austerity was meant to fix the problems.
It didn't. Brexit was meant to fix the problems. It didn't. Levelling up was meant to fix the problems. It didn't. Uh, another top down imposed agenda just wasn't going to work. And you can rebuild trust by showing that politicians trust people, but you've got to not overly constrain them. Of course, you have to monitor, uh, what's taking place. Of course, you need to be able to demonstrate value for money in the way that money is being used.
But if you impose strictures right from the front, you're not giving power to those communities. And that is something that is essential to this programme and why it's so different from previous programmes.
12:57
Speaker 5
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Speaker 5
And, you know, I share a lot of your your passion around this agenda, but the experience I've had in Hyndburn and I've heard it from other places as well, is that these chairs are volunteering over 20 hours a week, often in order to try and get these things off the ground. They are calling out for support from government because they are often building everything from scratch, and then they're dealing with incredibly difficult issues, often in the local politics that is still going on through these boards. So what are you doing to ensure that this programme will deliver for local communities, and what would you do differently if you could start this programme again?
12:57
Speaker 7
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Speaker 7
Well, we've we've established something called the network for neighbourhoods, uh, which is to make sure that the chairs and other leaders involved in these boards are able to network with each other and share best practice. The department with number ten has been facilitating, uh, that work because it became clear quite quickly. They felt isolated. Um, there is best practice that they're all developing that they can share across, even though the contexts are very, very different. There's learning that you can take from one place and apply as appropriate in a different context.
So that's happening. Secondly, um, is that network is also helping to build leadership within the community, uh, very often very poor, very held back communities have had local leadership suppressed rather than nurtured. Uh, and as part of this, we're, we're seeking, particularly through the early phase of the programme, to develop that leadership within the community so that they're better equipped as the programme proceeds to take more control over the programme as it and the changes it's making, so that that is the approach we're taking to to tackle the issues that you raise.
So that's happening. Secondly, um, is that network is also helping to build leadership within the community, uh, very often very poor, very held back communities have had local leadership suppressed rather than nurtured. Uh, and as part of this, we're, we're seeking, particularly through the early phase of the programme, to develop that leadership within the community so that they're better equipped as the programme proceeds to take more control over the programme as it and the changes it's making, so that that is the approach we're taking to to tackle the issues that you raise.
12:58
Speaker 5
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Speaker 5
And, um, finally that obviously there is, you know, hope in some, in plenty of places that there would be further funding. And currently the, the criteria prevent an area one constituency from having more than one in spite of potential quite significant levels of deprivation that might turn up in the same place twice. So might that criteria change in the future?
12:58
Speaker 7
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Speaker 7
Well, the I mean, because there's a limited pot of funding, I mean, 5.8 billion is significant, but it only reaches about 3% of, uh, of wards in the country. And we need an offer for the other 97% as well. And not every not every area is going to be able to get that level of funding. Um, so as we've, we've discussed previously, we're developing a place, uh, agenda, um, to focus on effective place based delivery so that areas that don't get pride in place funding can still get the benefits of how pride in place operates in those areas that do get the funding.
And that means focusing much more on place based delivery, which includes a place based service integration. So you get services in the locality integrating and working together better because you get better value for money that way, as well as making them easier for access to local people. We need national government services to be part of that as well, not just local services. So the place unit we've set up in Mhclg is intended to work with other government departments to make sure that they are also participating in place based integration, place based budgeting as well, instead of each different service having its own budget unrelated to other areas, you can pool budgets focused on a particular outcome you want to achieve, and that drives better cooperation between and across the different funding partners that will be involved in that.
And that's not just the state sector, that's the third sector and the private sector as well. So real collaborative working there. The third element of this, um, is more directly empowering service users and citizens. So they have a bigger say over what the services are seeking to achieve. And different commissioning models give different outcomes in that way. I'm particularly attracted by outcomes focused, user led, uh, commissioning models which are used quite widely in parts of local government, but they support um, groups with a particular need to identify the outcome.
They want to achieve the intervention to achieve it. And then the provider of that intervention, if they're not satisfied with the current one. If you add that to what I just said about place based delivery, place based delivery, you get a very different model of local public service reform that is much more directly accountable and responsive to local people, and it creates the benefits of place based working for areas that won't be receiving pride in place funding.
And that means focusing much more on place based delivery, which includes a place based service integration. So you get services in the locality integrating and working together better because you get better value for money that way, as well as making them easier for access to local people. We need national government services to be part of that as well, not just local services. So the place unit we've set up in Mhclg is intended to work with other government departments to make sure that they are also participating in place based integration, place based budgeting as well, instead of each different service having its own budget unrelated to other areas, you can pool budgets focused on a particular outcome you want to achieve, and that drives better cooperation between and across the different funding partners that will be involved in that.
And that's not just the state sector, that's the third sector and the private sector as well. So real collaborative working there. The third element of this, um, is more directly empowering service users and citizens. So they have a bigger say over what the services are seeking to achieve. And different commissioning models give different outcomes in that way. I'm particularly attracted by outcomes focused, user led, uh, commissioning models which are used quite widely in parts of local government, but they support um, groups with a particular need to identify the outcome.
They want to achieve the intervention to achieve it. And then the provider of that intervention, if they're not satisfied with the current one. If you add that to what I just said about place based delivery, place based delivery, you get a very different model of local public service reform that is much more directly accountable and responsive to local people, and it creates the benefits of place based working for areas that won't be receiving pride in place funding.
13:00
Speaker 8
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Speaker 8
Very quickly to your two answers to your questions. One, what are we doing to help places?So every place has a named individual in the department that is there to be their contact. So we recognise it's a lot for chairs, and we want to use the department's resources to help. Secondly, on spending money, we've been really clear that if there is a good case to spend the money out of area and to make an adjustment to the boundary, then we're really happy to look at that and you'll find us willing and able to try and fix it.
13:01
Speaker 5
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Speaker 5
But chairs having to write their own policies on every single element of these, you know, of the governance of these, it is an entirely bad use of their time and energy. Instead of focused on understanding that community and what it needs and getting the money out the door. So there's a real piece of work and opportunity there.
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13:01
Speaker 1
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Speaker 1
Thank you. Thank you. Just coming back to housing quickly, Secretary of State, obviously, your predecessor announced, way back in July 2024 that the government was developing a long term housing strategy. And you'll recall when you first appeared before our committee in November 25th, you said that we will have a strategy soon. That soon was supposed to be January 2026. It seems like there's a pattern forming with Mhclg where we keep having to wait, keep having to chase for many things.
Where is the long term housing strategy?
Where is the long term housing strategy?
13:02
Speaker 7
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Speaker 7
Um, it is just about ready. Uh it is um, I. I signed off what I assumed was the final draft very, very recently. Um, but because of other circumstances, we haven't been able to get it out. So I fully anticipate the very, very beginning of September that will be available. But the point of the long term housing strategy is to give certainty to the sector. Uh, and, you know, the sector can see what we're doing to give them certainty with the changes and reforms around leasehold, around social housing, around the £39 billion social and Affordable homes programme now opens to initial bids, planning reforms, the NPF and the other.
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Speaker 7
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Speaker 7
I thought, well, I think it's helpful to have everything pulled together in a single document. Uh, but, you know, less convenient for people is that they can see what we're doing in those separate areas through the policies that we're enacting and the reforms that we're bringing forward. But we it is just about ready. And I, I am sorry that we haven't been able to publish it already, but I again, it's right that an incoming Prime Minister should get a chance to give it the once over, but it is so, so close to being completed.
I really expect you'll have it by the very beginning of September.
I really expect you'll have it by the very beginning of September.
13:03
Speaker 1
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Speaker 1
Wait with bated breath. I hope that in addition to the discussions you'll be having discussions with Homes England in terms of the bids for the Social and Affordable Homes programme. In discussions around the inter-ministerial homelessness strategy as well. Will all of that be contained in the long term housing strategy?
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Speaker 8
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Speaker 8
Um so we'll want to advise the incoming administration. I mean, I would just say that Homes England and the department are in regular contact with, uh, actors in this space anyway, on a day to day basis. In we continue to have engagement and discussion, um, with the housing associations and all relevant.
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13:06
Speaker 1
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Speaker 1
Um, one area that continues to be in the news, and obviously a big chunk of MHC OGs and responsibilities is obviously community cohesion. Sometimes that's an area that's overlooked, but really an important area because of bringing the country together. Sadly, over the last few years, we've seen a number of high profile community and tensions and issues ranging from riots, protests, demonstrations. Um, the government published the Protecting What Matters paper in March, um, an area to address community and social cohesion with with only very few, um, time frames.
Um, do you feel that this is still an area that is on the government's agenda in terms of making sure it's an important one?And how is that taskforce going to drive the government's cohesion agenda in the future?
Um, do you feel that this is still an area that is on the government's agenda in terms of making sure it's an important one?And how is that taskforce going to drive the government's cohesion agenda in the future?
13:06
Speaker 7
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Speaker 7
Well, I'm absolutely this I mean, it was it was central to what the government doing and the fact that number ten and the Prime Minister himself were so centrally involved, in convening, uh, the task force holding, um, events, uh, in number ten, bringing partners in to discuss it shows the importance that the government, the government places on this. We always were aware that protecting what matters was a starting point, uh, not the end. Uh, we will all recognise as constituency MPs as well as ministers and select committee members the challenges that we face in social cohesion in this country, driven being driven by a very many, uh, many factors, economic inequalities being one of them.
Rapid demographic change being another. Um, and social media and algorithms, uh, also driving misinformation and disinformation, So driving misinformation and disinformation, which is which is affecting the situation. So protecting what matters is seeking to start working towards addressing some of those issues. So we just talked about, um, pride in place £5.8 billion coming into communities there, but it has a strong social cohesion element to actually as well, which was reflected in some of the decision making allocations, particularly in the most recent, um, 40 areas that got funding.
The insight is that whatever backgrounds people in a community may come from, and they will differ. Everybody in that community has a shared interest in making that community as prosperous and successful as possible. So we've tried to design pride in place in a way that acts as bridges, bringing the community together. When we have other forces in society that are trying to create barriers driving communities apart from each other. So you can see the effects of our social cohesion thinking in individual policy programmes like that.
Of course, we have no specific um initiatives like the anti-Muslim hostility definition to help us understand the nature of anti-Muslim hostility in order to be able to tackle it. And we had that horrific incident, didn't we, as well. Um, for. An event just over the last few days last weekend where, um, a large Muslim community event, people were sent home early because of terrorist credible live terrorist threats. That shows you the strength of what we're tackling. Um, the Home Office and Mhclg have allocated additional funding to keep places of worship.
Um, safer. Uh, whether that's um, mosques, synagogues or other places of worship. We've strengthened the powers of the Charity Commission to intervene in organising organisations masquerading as charities, which really, um, are sowing division in our communities, work to safeguard students on campus while also protecting freedom of speech, which is very important as well. But nobody on campus should be targeted because of their religion or their ethnicity in the way that we've seen increasingly in recent years. And we've been looking at algorithms as well, how we can give people more control over what content algorithms direct at them, because very many people will recognise the experience here of clicking on something, and it very quickly taking you to something which is hugely, uh, disturbing and troubling, but for very vulnerable and susceptible people can radicalise them.
So we need to be looking at the work on, um, on, on how we give people more control over algorithms. Um, the online safety act of course goes some way towards that, but we recognise there's further we need to go.
Rapid demographic change being another. Um, and social media and algorithms, uh, also driving misinformation and disinformation, So driving misinformation and disinformation, which is which is affecting the situation. So protecting what matters is seeking to start working towards addressing some of those issues. So we just talked about, um, pride in place £5.8 billion coming into communities there, but it has a strong social cohesion element to actually as well, which was reflected in some of the decision making allocations, particularly in the most recent, um, 40 areas that got funding.
The insight is that whatever backgrounds people in a community may come from, and they will differ. Everybody in that community has a shared interest in making that community as prosperous and successful as possible. So we've tried to design pride in place in a way that acts as bridges, bringing the community together. When we have other forces in society that are trying to create barriers driving communities apart from each other. So you can see the effects of our social cohesion thinking in individual policy programmes like that.
Of course, we have no specific um initiatives like the anti-Muslim hostility definition to help us understand the nature of anti-Muslim hostility in order to be able to tackle it. And we had that horrific incident, didn't we, as well. Um, for. An event just over the last few days last weekend where, um, a large Muslim community event, people were sent home early because of terrorist credible live terrorist threats. That shows you the strength of what we're tackling. Um, the Home Office and Mhclg have allocated additional funding to keep places of worship.
Um, safer. Uh, whether that's um, mosques, synagogues or other places of worship. We've strengthened the powers of the Charity Commission to intervene in organising organisations masquerading as charities, which really, um, are sowing division in our communities, work to safeguard students on campus while also protecting freedom of speech, which is very important as well. But nobody on campus should be targeted because of their religion or their ethnicity in the way that we've seen increasingly in recent years. And we've been looking at algorithms as well, how we can give people more control over what content algorithms direct at them, because very many people will recognise the experience here of clicking on something, and it very quickly taking you to something which is hugely, uh, disturbing and troubling, but for very vulnerable and susceptible people can radicalise them.
So we need to be looking at the work on, um, on, on how we give people more control over algorithms. Um, the online safety act of course goes some way towards that, but we recognise there's further we need to go.
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13:09
Speaker 3
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Speaker 3
Secretary, I want to take us on to local government finance if I can. Um in the first full financial year of this Labour government, a record 30 councils applied for exceptional financial support, which is what counts, as you know, councils do when they're trying to avoid bankruptcy. A year later, we set a new record of 36 councils. That was after the fairer funding review. In the three year settlement that your department set out. When's it going to get better?
13:10
Speaker 7
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Speaker 7
Well, you'll you'll recognise, as I do, having been a local government leader myself, that councils have gone through over 15 years, um, went through over 15 years of underfunding. Um and not only that, but funding was never adjusted to meet the changing nature of our population. You know, populations move around. Poverty doesn't just remain in one place constantly. Areas change and poverty moves around. But if you don't shift the funding formula to recognise that you get a system which is let more and more, um, out of kilter with the needs that we have in particular localities.
So one of the big things that fair funding did was it realigned funding with deprivation, uh, which pretty much maps onto need, um, before fair funding, only three out of ten areas got funding linked to deprivation and need. By the conclusion of fair funding, it was over nine out of ten. That is a dramatic change to happen in one go. It should have happened incrementally over 15 years, but because it didn't, we had to make the changes all at once. And that's why you saw such dramatic, uh, shifts all at once.
There's £78 billion goes into local government funding. Now that's a 6%, 6.1% uplift on the figure before. That's higher than inflation. Um, the LGA, of course, estimate that there is some quantum more, uh, that they think, uh, should go into local government. Well, there's a conversation to be had with the Treasury about those allocations, and I'm sure opportunities will arise as the economy continues to grow. But again, the funding wasn't there to do that all overnight. So we've had to go through a methodology, uh, and I put in place an extension of the recovery grant so that areas that have been hit the hardest by austerity, uh, but then would not have got, um, a fair settlement out of the fair funding formula were further protected where, for instance, there had been population change or population reduction, recovery grant protected those areas.
So they got a fair settlement as part of this in the final. The final point I'll make is this was the first three year settlement in a decade. And that allows councils to plan with much more confidence as they transition services to meet the needs of their populations.
So one of the big things that fair funding did was it realigned funding with deprivation, uh, which pretty much maps onto need, um, before fair funding, only three out of ten areas got funding linked to deprivation and need. By the conclusion of fair funding, it was over nine out of ten. That is a dramatic change to happen in one go. It should have happened incrementally over 15 years, but because it didn't, we had to make the changes all at once. And that's why you saw such dramatic, uh, shifts all at once.
There's £78 billion goes into local government funding. Now that's a 6%, 6.1% uplift on the figure before. That's higher than inflation. Um, the LGA, of course, estimate that there is some quantum more, uh, that they think, uh, should go into local government. Well, there's a conversation to be had with the Treasury about those allocations, and I'm sure opportunities will arise as the economy continues to grow. But again, the funding wasn't there to do that all overnight. So we've had to go through a methodology, uh, and I put in place an extension of the recovery grant so that areas that have been hit the hardest by austerity, uh, but then would not have got, um, a fair settlement out of the fair funding formula were further protected where, for instance, there had been population change or population reduction, recovery grant protected those areas.
So they got a fair settlement as part of this in the final. The final point I'll make is this was the first three year settlement in a decade. And that allows councils to plan with much more confidence as they transition services to meet the needs of their populations.
13:12
Speaker 3
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Speaker 3
And Secretary of state. All of that is fine, but it doesn't change the fact that the number of councils seeking exceptional financial support went up, not down, after we announced the three year settlement. And you mentioned the LGA, and I know you've been speaking to the LGA recently, because I do know that you speak to local authorities and you must have got the message from them. I mean, the LGA have done a survey where 51% of councils do not believe they will have the funding to cover statutory services by the end of that three year settlement.
Warm words about what the fair funding formula has done, there doesn't seem to be a lot of evidence from local authorities that they feel they are anything other than a financial catastrophe. At the moment, local government is disintegrating around us, is it not?There is simply not enough money in the system.
Warm words about what the fair funding formula has done, there doesn't seem to be a lot of evidence from local authorities that they feel they are anything other than a financial catastrophe. At the moment, local government is disintegrating around us, is it not?There is simply not enough money in the system.
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Speaker 7
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Speaker 7
I recognise the problem. I don't think it's warm words to adjust funding allocations in line with deprivation. That was the biggest change in 15 years, from three out of ten getting funding linked to deprivation to close on ten out of ten is a radical, radical shift, and it moved money to areas that needed it. Now, notwithstanding that, um, of course, I recognise the pressures that remain on local government funding. Um, in some areas there's further transformation work to be done and we've got work on, on underway through DfE.
Um on supporting children's social care. I made an announcement with the Secretary of State for education about our willingness to cap excess profiteering by providers of children's accommodation. And when you've got the average operating profit that those companies derive from children that are being looked after in those circumstances of £40,000 per child, that sounds pretty high to me. And when you've got children in some authorities costing £1 million a year, that looks pretty high to me. So there's interventions we can make that would cap parts of the demand led budget that are ratcheting way out of control, that will help councils to control, um, those costs.
But there's a bigger question, which isn't for my department, which is about the quantum of funding available, um, for local services and local government. Can I take some of the, I think some of the changes I described earlier on about place based working drive better value for money out of the system. And we need to do that to make sure every penny is working as effectively as possible. But there is a conversation the committee could have with Treasury ministers about their view on how the quantum needs to change over the coming years.
Um on supporting children's social care. I made an announcement with the Secretary of State for education about our willingness to cap excess profiteering by providers of children's accommodation. And when you've got the average operating profit that those companies derive from children that are being looked after in those circumstances of £40,000 per child, that sounds pretty high to me. And when you've got children in some authorities costing £1 million a year, that looks pretty high to me. So there's interventions we can make that would cap parts of the demand led budget that are ratcheting way out of control, that will help councils to control, um, those costs.
But there's a bigger question, which isn't for my department, which is about the quantum of funding available, um, for local services and local government. Can I take some of the, I think some of the changes I described earlier on about place based working drive better value for money out of the system. And we need to do that to make sure every penny is working as effectively as possible. But there is a conversation the committee could have with Treasury ministers about their view on how the quantum needs to change over the coming years.
13:14
Speaker 3
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Speaker 3
Just before I talk about council tax, more specifically, can I just pick your brains about the concept of core spending power?I was I was a local authority councillor. I know you were as well. And it used to frustrate the life out of me when government ministers would stand up and talk about core spending power in 2010, Council tax represented 36% of core spending power. Now it's 56%. So when government ministers stand up and say, we've increased the core spending power of this local authority, over half of that is actually local councillors increasing a regressive tax on their constituents.
I don't believe that's particularly honest way of describing how government is financing local government. Do you?
I don't believe that's particularly honest way of describing how government is financing local government. Do you?
13:14
Speaker 7
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Speaker 7
It is an accurate way of describing the funding that is available to a local authority. So while, you know, as a former council leader, I would have shared, um, some of. The thoughts that you've just, uh, just expressed, it is a fair way to look at the funding that's available to a council. Um, and whatever views people may have about, uh, council tax, it is a part of the mix and has been for a long time. Um, and you can't just discount the funding that's available through council tax and the services that it's, that it's funding, you're going to come onto council.
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13:15
Speaker 8
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Speaker 8
I think it's important. I think it's um, in, in areas where council tax take is very high. Yeah. We need to take that in. Why do we do it?Because like as um a constituency council in London with a huge council tax take, we need to have the council tax number so we can give them less grant, uh, equalise for their council tax and send more grant to areas of the country where the council tax take is less. So I do understand the point you're making, but I think for a fairness and equity point of view, it's actually helpful to have council tax in the numbers and in core spending power, because it allows us to adjust for some of the inequalities in the city.
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13:16
Speaker 3
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Speaker 3
Um on council tax. Um I think my position on this is fairly well known. I mean, we've heard earlier from one of our members that, you know, we could see this as a, an exit interview, uh, Wandsworth, if you live in Wandsworth in a band D property, you pay £1,020 a year if you live in Hartlepool and a band D property, you pay £2,556 a year. Is there any part of that system that you think is defensible?
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Speaker 7
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Speaker 7
There obviously, there are conversations going on about council tax policy, how it can be made more progressive. Uh, the best way of doing that, that is fair to everybody. That's a conversation that's underway, and it would be inappropriate for me to throw in my personal views as if they were the views of the department, because at this stage, they're not. And there's a conversation that we're both involved in about where that needs to go, where we have policy that is under, under underway, um, is the higher value council tax levy, the so-called mansion tax, where we have a consultation, I think closes closes today.
Um, in fact, in order that that can come into force in April 2028, it only affects, it affects less than 1% of the highest value properties, particularly concentrated in certain parts of inner London. It will raise around £430 million. Uh, that is intended to start to address, uh. Unfairnesses of the kind that you have pointed to. But there is an ongoing conversation.
Um, in fact, in order that that can come into force in April 2028, it only affects, it affects less than 1% of the highest value properties, particularly concentrated in certain parts of inner London. It will raise around £430 million. Uh, that is intended to start to address, uh. Unfairnesses of the kind that you have pointed to. But there is an ongoing conversation.
13:18
Speaker 3
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Speaker 3
Can I just test you a little bit on that?Because that's an interesting point that you've made there. Secretary of state, is your view that the money raised by that levy should be used to go to local authorities who are struggling with higher council tax bills, because that's not the position of the Treasury.
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13:18
Speaker 1
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Speaker 1
But just on that Secretary of State, why is that called the high value Council tax surcharge when for all our constituents who pay their council tax on a monthly basis, their local councils that will be collecting that that money is not going towards council services. It is not coming directly to those governments, those councils. So why is the council tax included in the title of that new property tax?
13:19
Speaker 7
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Speaker 7
You'd need to speak to the department that gave it its name rather than to me. But I see the problem, and I'm very in favor of continuing a conversation to find a way of making this property tax based, uh, form of revenue raising more progressive, because clearly it isn't fair to people living in lower value properties or, you know. Of the kind that Jonathan just described.
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13:20
Speaker 1
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Speaker 1
Do you not just on that Secretary of State, do you not feel that by creating a new property tax, it then diminishes the issue that we've been talking about on this committee?Many others have been talking about in terms of the government actually coming forward with genuine proposals to reform council tax, there will be no appetite from the Treasury to speak with Mhclg to Reform council tax, because they now have a new property tax bringing in revenue for them directly. Instead of dealing with the core issue of local councils having to come year in, year out to ask for exceptional financial support because no matter how much money you and other ministers continue to push and argue for local councils, it is not enough.
13:20
Speaker 7
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Speaker 7
Yeah, no, I recognise the validity of what you're saying there, chair, but it's not just a matter for the Treasury or Mhclg. This is something that would have to be agreed across government, including by number ten. Um so I don't want to set hares running if you'll forgive me. Um even though I share the concerns that this particular tax as it's currently configured is not progressive.
13:21
Speaker 1
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Speaker 1
And it's not progressive because and that's something that you've championed for many years, something that the incoming prime minister's championing around devolution. One of the key areas where I think the government has failed and held back his fiscal devolution. Yeah. Would you not agree that creating a new form of taxation goes against the government and the current government, and incoming Prime Minister's mantra of devolution to local government?
13:21
Speaker 7
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Speaker 7
This is such an exciting development that within the scope of devolution now sits fiscal devolution, because you can't devolve powers without resources if you if you do it that way, which is what Eric Pickles did when he had the job that I now have. I used to describe that as just devolving the blame because that's what it was really. If we really want to tackle the deep regional economic inequalities that pull our country apart, you have to devolve power and there has to be fiscal devolution included within that.
Now, the Chancellor in her May's lecture, made clear that the Treasury would be working towards, um, the deep. Fusion of elements of income tax to get away from the fragmented grant based system controlled by Whitehall at the centre, uh, that we currently operate under but under the previous government saw areas competing for funding rather than being able to access funding that they needed to drive economic growth and open up opportunities in their own in their own areas. So it's absolutely right. We should be looking at fiscal devolution, um, areas that start to grow.
Their economy should see a benefit from that to their locality. You need an equalization mechanism within it as well to ensure that funding goes to areas that are not able to grow their economy so that we don't end up like the US, where you have wealthy areas that have a higher, much higher, uh, revenue base that can continue to become more prosperous while other areas just continue to sink. So of course, there would need to be an equalization mechanism within that. I mean, we will be looking as well at business rate, devolution, business rate retention on the same basis.
And with an equalization mechanism. But we have to pursue fiscal devolution if we are serious about devolution.
Now, the Chancellor in her May's lecture, made clear that the Treasury would be working towards, um, the deep. Fusion of elements of income tax to get away from the fragmented grant based system controlled by Whitehall at the centre, uh, that we currently operate under but under the previous government saw areas competing for funding rather than being able to access funding that they needed to drive economic growth and open up opportunities in their own in their own areas. So it's absolutely right. We should be looking at fiscal devolution, um, areas that start to grow.
Their economy should see a benefit from that to their locality. You need an equalization mechanism within it as well to ensure that funding goes to areas that are not able to grow their economy so that we don't end up like the US, where you have wealthy areas that have a higher, much higher, uh, revenue base that can continue to become more prosperous while other areas just continue to sink. So of course, there would need to be an equalization mechanism within that. I mean, we will be looking as well at business rate, devolution, business rate retention on the same basis.
And with an equalization mechanism. But we have to pursue fiscal devolution if we are serious about devolution.
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13:23
Speaker 3
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Speaker 3
Thank you. My, my final question, really, because you raised the point about, uh, social care, albeit in relation to children's social care. But I just want to focus for a moment on adult social care. Does it frustrate you as a secretary of state, that the organisations that you are trying to support, i.e. local councils, spend the vast majority of their money on an area of spend that isn't actually within your department?
13:23
Speaker 7
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Speaker 7
Well, it's not just about my department. This is a whole government operation. It's one of the reasons why I think devolution is, uh, is right. Because while Whitehall is too silo driven, you know, you've got whole departments with ministers and lots of officials in who see the world through the prism of the services that they're delivering. But if you're at the receiving end in a community, uh, you know, an individual, those distinctions don't make much sense to you if the services don't tie up in the right way.
So I think devolving more to local areas so they can tie them up differently and better to suit the needs of their local communities is the right thing to do. Um, it also means things will come together in a more meaningful way. So you can integrate those services and pull budgets to deliver better outcomes for people than if you're just looking at one particular minister in one department has control.
So I think devolving more to local areas so they can tie them up differently and better to suit the needs of their local communities is the right thing to do. Um, it also means things will come together in a more meaningful way. So you can integrate those services and pull budgets to deliver better outcomes for people than if you're just looking at one particular minister in one department has control.
13:24
Speaker 3
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Speaker 3
Of you mentioned earlier you regretted perhaps the pace of change around housing for a variety of reasons, that we don't need to get back into. Do you regret the pace of change around social care?Do you wish we had gone further and faster, more quickly towards our stated aim of a National Care Service to relieve that pressure on local.
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Speaker 7
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Speaker 7
I don't think it's particularly helpful to sit here and air regrets. I think we need to look at what we can do to fix the problem. And what I just described about place based working will mean that the existing resource can be used to get far better value for money and better outcomes for people, including in social care. The discussions we just had about fiscal devolution will mean that we can get more money to the places that need it, and economic growth in those areas that will benefit not just their region, but the whole country.
So there's a huge change we need to make here to the way that government works. That's going to be much more meaningful to people in the future than any regrets I might have about the past.
So there's a huge change we need to make here to the way that government works. That's going to be much more meaningful to people in the future than any regrets I might have about the past.
13:25
13:25
Speaker 4
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Speaker 4
Last year, Secretary of State, your department said it was working with the Local Government Association on a comprehensive review of duties on local authorities. It was meant to take about a year. Is that review still going and when is it due to finish?I asked, particularly as my local authority, Woking. We don't have certain facilities, public toilets or other things. We're merging next year with other authorities that do, ensuring that review is done before LGR really gets up to pace would be really important.
13:26
Speaker 7
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Speaker 7
Yeah, well, we've been working with the sector and published proposals on a local outcomes framework in February. Um and in a recent speech that I gave, I said that we were going to incorporate elements of that into a new neighbourhood guarantee. So that what is quite a jargonistic and technical process can become much more meaningful to residents. So they can see what they can expect to get in terms of basic core service delivery on their street, in their neighbourhood and in and in the town, or the high street or the district centre where, uh, where they live.
So we've got that whole new process now that includes looking at duties and requirements on local government. You know, one of the I don't often praise the previous conservative government, but one of the things that they did that was beneficial in 2010 was to ring fence a lot of grants coming into local government. I think what was 150 different ring fenced grants were ring fenced. Tragically by the end of their period in office, we had more than the initial 150 ring fenced grants. So the same process has to happen again.
But if you ring fence things, if you give local authorities more discretion about how they can use their funding, then they will take decisions more in line with local priorities rather than.
So we've got that whole new process now that includes looking at duties and requirements on local government. You know, one of the I don't often praise the previous conservative government, but one of the things that they did that was beneficial in 2010 was to ring fence a lot of grants coming into local government. I think what was 150 different ring fenced grants were ring fenced. Tragically by the end of their period in office, we had more than the initial 150 ring fenced grants. So the same process has to happen again.
But if you ring fence things, if you give local authorities more discretion about how they can use their funding, then they will take decisions more in line with local priorities rather than.
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13:27
Speaker 8
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Speaker 8
It'll be something for the new administration. The only thing I'd add to what the Secretary of State has said is actually, we found that a lot of what we're trying to achieve can be done by rolling in funding. So what happens is you've got a plethora of different pots from government departments, each with their own conditionality and timetables. And in the Spending review, we've made a massive step forward in saying there are about five consolidated pots that make up the local government finance settlement.
And through that process, we were able to take a hell of a lot of conditionality up and reporting out of the system. But I agree with you. It's right that we report on that and reflect it in the overall review of.
And through that process, we were able to take a hell of a lot of conditionality up and reporting out of the system. But I agree with you. It's right that we report on that and reflect it in the overall review of.
13:28
Speaker 4
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Speaker 4
The new administration. There'll be an announcement, um, moving on to local authority debt that is now over 154 billion. How worried are you by that?How sustainable do you think that is?My own local authority account for just one constituency covers £2 billion worth of that. It's the single largest indebted local authority in the country. The government, thank you for this, have agreed to write off £500 million worth of that. Um, that is the cost of local government reorganisation for you.
And there might be more costs to that. When you embarked on LGR, did you fully understand that?That's, that's what the level of upfront cost would be to do debt to debt write off to ensure LGR would be implemented.
And there might be more costs to that. When you embarked on LGR, did you fully understand that?That's, that's what the level of upfront cost would be to do debt to debt write off to ensure LGR would be implemented.
13:29
Speaker 7
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Speaker 7
Administration in Woking that was responsible for that was absolutely catastrophic. And because of the scale and severity of that, the government had to step in. Um there was there was no option other than other than to do that. Um, underlying all of the reforms we're making over funding, um in local government and local government reorganisation is to establish a much more secure and stable foundation for local government so that more secure and sustainable local government, local public services can be built, can be built on them.
The changes to funding and linking it back with deprivation are intended to achieve that. The interventions in cases where there's excessive profiteering going on are intended to achieve that, and local government reorganisation is intended to, um eliminate duplication in those areas where there are two tiers of local government so that the savings can be ploughed back into frontline services, but also is to prepare those areas for eventual mayoral devolution, which is the means by which regions will be getting more control over their own destiny. And we can start to address the economic inequalities that mean that people have different life chances in different parts of the country, different parts of the country, in a way that is clearly unacceptable.
So that's the approach that we're taking now. The debt in local government, like, uh, like the national debt, uh, as well, is something that this government needs to work towards managing. The fiscal rules are in place to enable us to do that. The reforms in local government are intended to make sure that we have a financially sustainable sector for the future.
The changes to funding and linking it back with deprivation are intended to achieve that. The interventions in cases where there's excessive profiteering going on are intended to achieve that, and local government reorganisation is intended to, um eliminate duplication in those areas where there are two tiers of local government so that the savings can be ploughed back into frontline services, but also is to prepare those areas for eventual mayoral devolution, which is the means by which regions will be getting more control over their own destiny. And we can start to address the economic inequalities that mean that people have different life chances in different parts of the country, different parts of the country, in a way that is clearly unacceptable.
So that's the approach that we're taking now. The debt in local government, like, uh, like the national debt, uh, as well, is something that this government needs to work towards managing. The fiscal rules are in place to enable us to do that. The reforms in local government are intended to make sure that we have a financially sustainable sector for the future.
13:30
Speaker 4
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Speaker 4
Sort of pushing you more than 154 billion. That's the nationwide local authority debt. Do you think that's unsustainable and you're working to reduce it?When you embarked on LGR for Surrey, I appreciate it wasn't wasn't you did the department acknowledge and recognize that to deliver that LGR, you might have to significantly write off debts?500 million is what you've written off already. And that might be the first half of the debt write off. Is this meaning LGR is not saving what you thought it would?
13:31
Speaker 8
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Speaker 8
Let me let me have a go. Um, so, uh, on the overall, uh, borrowing levels in local government, we've um, obviously this gets reported into the fiscal rules. The local authority self-financed expenditure goes into the overall, uh, UK debt total. So we monitor it extremely carefully. We've done a number of things over recent years in order to get a grip of it, to ensure we don't have Woking. Uh, Mark two, that includes debt caps that we can introduce at the drop of a hat.
We've changed the guidance so councils can only borrow for activities that are core to the running and function of that councils. We don't want to see them in property speculation or any other um sort of illegitimate activity. So I think we have a much better understanding and grip of, of debt in local authorities than we did previously. On the specific point of Woking, as you well know, we put £500 million into solving the problem. Uh, we know that a lot more work needs to be done.
We know that we need to consider that in light of local government reorganisation, and then to look at the plan that the new West Surrey Council has for both setting a budget and for asset disposals, we are then very happy to continue to have a conversation, not least on capitalisation. There is obviously the outstanding question of what else then could be done for Woking, and that is something we're prepared to lead into. Obviously the balance that we are trying to strike is being fair to the taxpayers in Woking, but also in the rural and Warrington who are funding a lot of this.
Uh. And so we want it's an ongoing conversation, looking at all the levers in our disposal. And yes, we were aware of both the risks and opportunities that local government reorganisation presents for fixing that debt.
We've changed the guidance so councils can only borrow for activities that are core to the running and function of that councils. We don't want to see them in property speculation or any other um sort of illegitimate activity. So I think we have a much better understanding and grip of, of debt in local authorities than we did previously. On the specific point of Woking, as you well know, we put £500 million into solving the problem. Uh, we know that a lot more work needs to be done.
We know that we need to consider that in light of local government reorganisation, and then to look at the plan that the new West Surrey Council has for both setting a budget and for asset disposals, we are then very happy to continue to have a conversation, not least on capitalisation. There is obviously the outstanding question of what else then could be done for Woking, and that is something we're prepared to lead into. Obviously the balance that we are trying to strike is being fair to the taxpayers in Woking, but also in the rural and Warrington who are funding a lot of this.
Uh. And so we want it's an ongoing conversation, looking at all the levers in our disposal. And yes, we were aware of both the risks and opportunities that local government reorganisation presents for fixing that debt.
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13:32
Speaker 4
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Speaker 4
Thanks. I'm just going to finish on devolution, if that's okay. You've made the argument. There's one I agree with. It's one the incoming government agrees with on the benefits of devolution. Um, just a quick point of clarification. To start off, you said in a previous answer that one of the things that's going to be on the docket for you or whoever does your job in a couple of weeks time, um, will be future Mayoral strategic authorities decisions on the next wave.
Is that more incoming that we haven't already heard of?Or is that the next stage of those that are on the fast track program?
Is that more incoming that we haven't already heard of?Or is that the next stage of those that are on the fast track program?
13:33
Speaker 7
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Speaker 7
Well, we've got the um for devolution priority areas coming forward. So that's Cumbria, Cheshire and Warrington, Sussex and Brighton and Hampshire. Um and then um coming behind them, Norfolk and Suffolk and Greater Essex. So that will continue. And we expect all of those areas to eventually become mayoral strategic authorities.
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13:34
Speaker 4
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Speaker 4
Yeah. I mean, so that's what I'm going to come on to. So we accept. If we accept the argument that devolution is really good, particularly for local areas that have it, there is and we are heading in the direction of moving more powers down, particularly fiscal devolution. There is a real fear that if you have large chunks of the country that do not have devolution in place, those places, by definition, would get left behind. Now, as far as I can see, the government there is currently not the funding in place or a plan in place to get full coverage of devolution within the department at the moment.
Do you think that needs rectifying and what's your plan to rectify it?
Do you think that needs rectifying and what's your plan to rectify it?
13:35
Speaker 7
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Speaker 7
Well, I mean, some of this will be for the incoming government. But but this is clearly a rolling programme of devolution and we're making huge headway with it. The LGA conference last week, there was some pushback at the pace at which this government is going at through local government reorganisation, um, and devolution, but we can't slow it down because if we want to tackle what I suspect you think is the root cause of the problems we face in this country, which is regional and economic inequality, we have to get power out of the centre because it's having power controlled only by the centre.
That's led to this problem. The fact that we've got seven of the poorest regions in northern Europe in this country, which is the second richest country in Europe, that one fact tells you everything you need to know about what's gone wrong. And that's what we're trying to correct.
That's led to this problem. The fact that we've got seven of the poorest regions in northern Europe in this country, which is the second richest country in Europe, that one fact tells you everything you need to know about what's gone wrong. And that's what we're trying to correct.
13:35
Speaker 4
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Speaker 4
Yeah, I think I think we both definitely agree on the benefits of this. I'm just we cannot achieve it unless we have wide devolution roll out. Yes. Now, if you take my area, for example, we have been begging the department. We would have come in on our hands and knees and begged the department on a daily basis to be given devolution. And the department has basically constantly turned around to us in our local area and said, sorry, there isn't the money to give you devolution.
So this.
So this.
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13:36
Speaker 4
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Speaker 4
So. But you can't get. But if this is going quicker, the longer you leave it, the slower you roll it, the more left behind places get. So there clearly needs to be an aim as quickly as possible to get that full coverage. And it clearly, clearly isn't currently the funding in place in the department in order to do so. Do you think that should be one of the things the new in the coming weeks with the agenda?
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13:38
Speaker 7
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Speaker 7
Within the resources that are available, as well as mayoral strategic authorities, we've got foundation strategic authorities as well that are going at a slightly different pace. But the approach that we've taken is to be very pragmatic and work with areas that are ready and equipped to take more powers, uh, on themselves. That's how the right to request is working, with the assumption that Whitehall will say yes to requests, unless there's a very compelling reason why, uh, why that wouldn't happen. But that principle is not constrained only to those areas that already have been designated as a priority areas.
Ultimately, it needs to affect everywhere.
Ultimately, it needs to affect everywhere.
13:39
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13:39
Speaker 4
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Speaker 4
Um, and the other barrier, of course, to devolution being rolled out across the country is some places in the country, um local. Cities might veto it. Now my understanding was it was going to be in the devo bill that local, we think it was going to be in the devo bill that local authorities couldn't veto it. And it was the Secretary of State. And that was then taken out in the House of Lords. What was why was it taken out in the House of Lords, and why are you not worried?That's going to stand in as a barrier to solving this devolution problem?
13:40
Speaker 8
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Speaker 8
Um I think it was taken out because that's what the express will of Parliament as part of the ping pong process. And that's what both houses. That was the consensus that both houses arrived at through the process. It's obviously in the original version and it was taken out through through amendments. I would just say, having sort of been involved in pretty much every devolution agreement there has been over the last ten years, my strong view is that you can do this by consensus, and that once especially, there is momentum behind the agenda and the government says, this is the thing that we want to do.
You don't actually need coercion. You might get to 1 or 2 places left in the country where there isn't a devolution arrangement, and then come back and try and persuade more strongly. But I think actually you can get an awful lot of progress through through consensus. The only other thing I'd just add to your previous question, and I appreciate that, having spent a lot of time trying to persuade places to go and get a mayor to now not being able to move as fast as we would like to is is frustrating.
In publishing the the new areas for spatial development strategies, we are clear. We are saying that that is not an absolute blueprint for how devolution will be in the future. But for example, in your own, uh, patch in Blmk, we've been we've been clear that we want a spatial development strategy over that geography. And hopefully that starts to get you partnership working between councils and for the constituent for the councils in that patch to think about economic developments and economic geography in a holistic way.
So that is that is some progress. But I appreciate.
You don't actually need coercion. You might get to 1 or 2 places left in the country where there isn't a devolution arrangement, and then come back and try and persuade more strongly. But I think actually you can get an awful lot of progress through through consensus. The only other thing I'd just add to your previous question, and I appreciate that, having spent a lot of time trying to persuade places to go and get a mayor to now not being able to move as fast as we would like to is is frustrating.
In publishing the the new areas for spatial development strategies, we are clear. We are saying that that is not an absolute blueprint for how devolution will be in the future. But for example, in your own, uh, patch in Blmk, we've been we've been clear that we want a spatial development strategy over that geography. And hopefully that starts to get you partnership working between councils and for the constituent for the councils in that patch to think about economic developments and economic geography in a holistic way.
So that is that is some progress. But I appreciate.
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13:41
Speaker 2
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Speaker 2
Yeah. Thank you. Um, just coming back to local government reorganisation and the announcements later this week. Um, can you just outline how council leaders will be informed and how members of Parliament will be informed?Because that's a lot of council leaders. You're going to have to phone up. So you're going to have to start the process.
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13:43
Speaker 1
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Speaker 1
Thank you very much. Thank you. Well for appearing before the committee. Obviously, we see that the Department continues to have many big and competing areas, big areas in terms of legislation, and we hope that Mhclg continues to be a key focus for the incoming Prime Minister as as the government continues on its manifesto.