The government’s housing department has returned £245 million in unspent funds, originally intended to rehabilitate unsafe buildings, to the Treasury after forcing cash out of construction firms.
A Freedom of Information request by local government researcher Jack Shaw showed the cash is among £1.9 billion in unspent capital money returned by the Department for Levelling, the ‘Housing and Communities (DLUHC).
The £1.9 billion figure, which covers 2022/23, includes £1.2 billion initially earmarked for the Help to Buy scheme and £255 million for affordable housing.
The DLUHC handed over another £90m to help the MoD pay for military aid to Ukraine.
The rest refers to other housing initiatives.
Government documents said the £245m for building safety work was being paid back because of “the department’s work to encourage developers to fund fire risk remediation for building safety life”.
Over the past year, the housing secretary, Michael Gove, has made strong construction firms and developers sign contracts to repair unsafe buildings, using threats to ban them from public sector contracts.
The government said public funds that had not been spent as a result would be “allocated in future years to meet the government’s funding commitment to the [building safety] program”.
This month, a Construction news The research revealed that progress in repairing unsafe buildings was hampered by large increases in the cost of cladding materials.
Peter Johnson, chairman of supplier Vivalda, said: “Some manufacturers increased their prices in stages through 2022 by up to 45 percent. I’m alarmed by some of the increases I’ve seen around the track.”
Government documents said other cash was returned due to “lower demand for the Help to Buy scheme”, delays in the delivery of the housebuilding fund “leveling off due to market uncertainty of housing”, as well as “a pause in investment”. decisions and reduced appetite for loans to the Housing Construction Fund due to market conditions”.
Dr David Crosthwaite, chief economist at the Building Cost Information Service, said: “Hopefully this is not a precursor to the government’s wider review of the construction pipeline expected in the autumn.
“However, it is no real surprise that DLUHC is struggling to find housing schemes to invest in. The government no longer has the ability to directly influence housing supply as supply is completely controlled by private developers who are reducing plans, given the current economic climate.”
A DLUHC spokesperson said CN: “These are multi-year funding programs that are being spent flexibly, meaning some money can be rolled over to future years based on demand and the broader economic climate.
“We have a strong track record in house building, with more than 2 million homes delivered since 2010. Our target to deliver 300,000 homes a year remains and we are fully committed to funding and delivering our programs that give us help to achieve this target, including the £11.5bn Affordable Housing Programme’.
