Ministry of Housing, Communities and Local Government

Florence Eshalomi Excerpts

Tuesday 24th June 2025 Commons Chamber

[Florence Eshalomi (Vauxhall and Camberwell Green) (Lab/Co-op)]

I thank the Backbench Business Committee for finding time for this important and urgent debate. The Ministry of Housing, Communities and Local Government is responsible for some of the biggest areas that impact all of us every single day, and I welcome the ambitious drive of the Deputy Prime Minister and her Ministers to deliver in those areas.

For too long, we have simply failed to build the homes that people need: the affordable homes for young people stuck at home or in the unaffordable private rented sector; the family homes for people whose kids have outgrown sleeping in the same room; and the social rent homes to get people off the social housing waiting lists and give the 164,000 homeless children a safe and permanent roof over their head.

I welcome that the Department is addressing head-on the financial distress that many local authorities are in. Last year, a record 30 local authorities received so-called exceptional financial support, which allows them to sell long-term assets or take out loans just to pay for their day-to-day costs. Due to the pressures they are under, some councils now have no choice but to hollow out their services in order to deliver vital services for residents. How can that be sustainable in 2025? How can it be fair that local people ultimately pay the price when their councils cannot fix up their town centres and have to cut vital services like bin collections just to make ends meet?

If the Department is going to get to grips with these dual crises and deliver on its ambitions, its plans to address them must be fully funded. When we look at the estimate and the recent spending review, there is good news for affordable housing and social housing, although I do have some questions for the Minister, which I will come to. On local authority finances, however, the Select Committee remains concerned that no new money is on the way. The spending review promises

“an average overall real terms increase in local authority core spending power”,

but only if local authorities increase council tax by the maximum allowable under legislation, passing the buck on to councils and raising the taxes we all pay in our local area.

If the Department is serious about ensuring everyone has access to an affordable home, we must end the decades of failure to build the homes we desperately need. That is why I welcome the Government’s ambition and commitment to deliver 1.5 million new homes during this Parliament, but evidence to our Select Committee from the sector has been clear: if the Government want to increase house building towards delivering more than 300,000 homes a year and reaching their target, social housing must be a substantial part of that mix. Ministers have said that the 1.5 million target is “stretching”, and the message we have heard from the sector is clear. In November, the Minister for Housing and Planning told us that, rather than a target of 300,000 homes per year over five years,

“The trajectory is an upward one”.

He said:

“The precise curve of that trajectory is dependent on factors like… the spending review settlement”.

We therefore warmly welcome the announcement in the spending review that the next affordable homes programme for 2026 onwards will be worth £39 billion. The estimate provides almost £400 million of uplift for the current affordable homes programme, which runs from 2021 to 2026. It is important that we continue to fund that if we are to reach the aim of 1.5 million new homes, but we need to start the building now, not towards the end of the decade. That is why I would be grateful to get some clarity from the Minister and the Department. Ministers have said they will publish a long-term housing strategy later this year, to set out how they will meet the 1.5 million target.

[Chris Vince (Harlow) (Lab/Co-op)]

This morning I met one of my constituents who is a care leaver, and she spoke of the huge challenges she faced in getting housing, partly because of the lack of affordable housing. Does my hon. Friend agree that supporting care leavers needs to be part of the housing strategy?

[Florence Eshalomi]

I thank my hon. Friend for that really important intervention. It is clear that so many people desperately want to get their foot on the housing ladder and are worried about the precarious nature of private renting, which is why we welcome the Government’s ambition to end no-fault evictions, but there is much more we can do, and it starts with building the homes.

It is important that the Government set out their plan for reaching their target, instead of leaving it too late, so I have three questions for the Minister. First, when will the House have clarity on how much funding will be coming forward in each year of the 10-year affordable homes programme? The Government have said that spending will reach £4 billion a year in 2029-30. What does that mean until then? While the £400 million uplift accounted for the affordable homes programme is welcome, it is not clear that that is a sufficient rise for the Government to achieve their goal of 1.5 million new homes.

Secondly, when will we see the long-term housing strategy? The Government have said that the strategy will be published “later this year”. Now that we have the long-term certainty of 10 years’ worth of funding, housing associations are calling out for clarity—they want to get building the homes that we need.

Thirdly, what discussions is the Department having with Homes England about the design of the new affordable homes programme? What is the Minister’s view on how much of that funding should go to shared ownership or right to buy? My Committee has consistently called on the Department to set out how that target will be achieved by tenure, including the important target of social rented homes.

My Committee has been undertaking an inquiry into local government funding and we have heard that local government continues to be under severe financial strain. Local authorities across the country are being asked to deliver ever more, but simply have not been given adequate funding to do so. I welcome the Department’s day-to-day spending in respect of local government and the uplift of 22%—£2.5 billion overall—according to the proposed estimate.

However, the financial strain councils are facing is almost entirely driven by high-cost, demand-led services, over which councils have little control. Those services, which include the provision of social care and homelessness support, are vital and often relied on by some of the most vulnerable people in our respective areas. The cost of social care has soared over recent years. In 2023-24, local authorities in England spent £20.5 billion on adult social care—19% of the total service net expenditure. If children’s social care is included in that figure, it is over 30% of the total budget.

A significant proportion of the 22% uplift in the estimate comes from new money—over £850 million—for adult social care grants. I welcome that much-needed injection of funding. There is also an uplift of £684 million for children’s social care, but that figure appears to be somewhat inflated by a budget transfer from the Department for Education. While that uplift for the Ministry is welcome, it still may not be enough.

I want to touch briefly on homelessness and temporary accommodation again. Our first inquiry as a Select Committee in this Parliament deliberately chose to look at the sharp end of the housing crisis, and we published reports on children in temporary accommodation and rough sleeping. We found that at the heart of the crisis are over 165,000 homeless children and their families, who are often voiceless, out of sight and stuck in completely unsuitable temporary accommodation. That is also damaging council finances. I have repeated the figure before and I will repeat it again: councils spent £2.29 billion on temporary accommodation in 2023-24, which amounts to London boroughs spending a combined total of £4 million per day on temporary accommodation. That is not sustainable.

The estimate includes over £260 million in funding for the rough sleeping prevention grant, and an uplift of £194 million in the homelessness prevention grant. Again, while these uplifts are a positive step in the right direction, my Committee heard that the restrictions placed on the homelessness prevention grant are quite troubling for some London councils. The new ringfencing introduced for 2025-26 requires almost 50% of that grant to be spent on that specifically. The homelessness situation in the capital is not deceasing and boroughs are spending almost 80% of that funding on temporary accommodation. The Committee urges the Government to engage with councils to solve the issue, to ensure that we do not see a reduction in provision and to address homelessness levels.

The current system also has small, short-term pots of funding. We urge the Department to reform those funding streams to ensure that there is long-term sustainable funding, instead of multiple, short-term funding pots.

My Committee is concerned that there is slow progress on the inter-ministerial group that is developing the strategy. We know that the Department plans to publish that “later this year”. This area may not be in the Minister’s direct remit, but will he be more specific about when we will get that strategy? Given that we cannot end homelessness without building the social homes we need, could the homelessness strategy be published at the same time as the long-term housing strategy?

There is so much to welcome in the estimate for 2025-26. The Government are moving in the right steps and the right directions, but we need to hear the detail of the affordable homes programme funding, especially if we are to deliver a boost to housing before the end of this Parliament. We need to ensure that our local authorities are on a stable footing to provide for the most vulnerable in our society, whether it is those who need adult social care, people sleeping rough or families at risk of homelessness. I welcome the funding commitments outlined in this estimate, but I urge the Government to go further and be more ambitious in their funding and financial support for these priority areas. I look forward to hearing the Minister’s response to my questions.

[Several hon. Members rose—]

--- Later in debate ---

[Florence Eshalomi]

I thank the Minister and the 15 Members from across the country who have taken part in the debate, which shows the value we place on our local authorities. For far too long, our local councils have not always got the recognition they deserve, but they are the first line of defence for all our constituents, and it is right that they are properly funded to carry out this vital work.

The Minister outlined some of the key areas where the Government are making big changes, and it is important that we continue to press him on those key areas and ask these difficult questions—not because we want to, but because we see this day in, day out in our inboxes, and it is vital that we address it. We do not want any more councils declaring bankruptcy, we do not want any more section 114 notices being issued, and we do not want any more young people tragically losing their life because of the temporary accommodation they are living in.

It is important that we help the Government in their ambition to build the homes we need. The £39 billion outlined is a step in the right direction. Our cross-party Select Committee will continue to ask the Government these questions, because we believe that every single person across the country deserves a safe, secure home that they can call their own.

Question deferred until tomorrow at Seven o’clock (Standing Order No. 54).