DLUHC told to ‘get a grip’ as watchdog reveals 32,000-home shortfall in AHP

A spending watchdog has revealed a forecast 32,000-home shortfall across the government’s two most recent affordable homes programmes.

The National Audit Office, in a report examining the 2016-21 and 2021-26 programmes, said the Department for Levelling Up, Housing & Communities (DLUHC) is now predicting significantly fewer homes to be delivered than originally intended.

The report said the government is forecasting 157,000 new homes under the current 2021-2026 programme, 23,000 below the initial target of 180,000 homes “should economic conditions allow”. The government also expects 241,000 homes to be built under the 2016-21 programme, compared to its target of 250,000 homes.

Meg Hillier, chair of the Public Accounts Committee, said the report shows the government’s attempt to fix the housing crisis “is not good enough” and warned rising inflation and labour shortages could make the shortfall even larger if action is not taken.

She said: “DLUHC needs to get a grip by delivering on the targets it set itself and better directing support to those who need it the most.

“As it stands, the chances of millions of ordinary people accessing affordable housing is depressingly unattainable.”

The NAO report said the government also does not expect to meet its target of 10% of units delivered through the 2021-26 programme to be supported homes and is at “high risk” of missing its 10% target for homes in rural areas.

The NAO also made multiple criticisms of the way the AHP programmes have been managed.

It said the business case for the 2021-26 programme did not follow best practice as it was produced after decisions about grant funding and targets had already been set.

“Its business case did not sufficiently consider delivery risks or whether it had adequate arrangements to oversee the programme”, the report said.

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It said DLUHC had inadequate oversight of the Greater London Authority, which administers the AHP in London in the 2015 and 2016 programmes. The NAO said this led to errors in the management of the programme, including £1.8bn given to the GLA but not spent between April and October 2021. This led to delays in the signing of contracts while GLA and the government resolved the issue.

The report said: “The department accepts these payments were a basic error of programme management, caused by a lack of understanding within the department and the GLA about when funding should be transferred”. As of 31 March 2022, the GLA had no achieved housing starts under the programme.

The report also said there is a lack of strong incentives to deliver affordable housing in high-housing need areas and that in 2018 the process for assessing strategic partnership bids was “less formal” with “no objective scoring system” although it has since improved.

A DLUHC spokesperson said: ““We welcome the NAO’s report, which recognises the programme is forecast to deliver around 400,000 new homes - despite the global headwinds resulting from the pandemic, supply chain pressures and the current economic climate.”