CHC insight: As Senedd Committees publish draft budget scrutiny, this is what we still need to see for social housing

In Welsh Government’s draft budget narrative, issued in mid-December, Rebecca Evans, the minister for finance and local government, noted that: "...we have had to take incredibly difficult decisions – the starkest and most painful since devolution. This has not been a typical year, where we have had an abundance of positive choices to make about where we can target increased and additional investment."

While we recognise that it brought challenging news for the Welsh public services that people rely on, research and evidence has shown time and time again that having a safe, warm and affordable home, and support systems, is vital to everyone’s life chances. Without adequate funding and support from Welsh Government, not-for-profit housing associations will struggle to play their full part in supporting social housing tenants and their communities, and providing the affordable homes that Wales needs.

Decarbonisation

In its report, the Climate Change, Environment, and Infrastructure Committee said that decarbonising Wales' housing stock is one of the "main challenges" facing this and future Welsh Governments.

It noted that, "...we are concerned that a fully costed plan to inform future investment decisions is still years off” and that until an assessment of the level of investment required to decarbonise social housing, and long-term plans for delivery were made, “...the Welsh Government is making spending decisions in the dark."

Commenting on the Committee’s report, Elly Lock, Community Housing Cymru (CHC), head of policy and external affairs, said: “Housing associations are already playing their part in helping Wales reach its net zero goal. Across the country they have implemented innovative solutions to decarbonise homes which work for their communities and they want to go further.

“However, they will not be able to progress without essential tools and funding. The Senedd committee has identified something that we have been saying for some time: for our sector to achieve Welsh Government’s decarbonisation ambitions, we need long-term financial certainty and a deliverable plan.

“We support Welsh Government’s aspirations - but we need a sector-wide solution that builds on the work that housing associations have already done to decarbonise the homes they manage, takes advantage of technology, develops a Wales-based supply chain and provides an economic boost to our communities.”

Supply

Building new homes is the ultimate solution to the housing crisis, which is why - even in the face of multiple systemic challenges - housing associations continue to play a big part in delivering the affordable housing that Wales needs. In the last few years, they have built up to 80% of all new social homes across the country.

The draft budget saw Welsh Government acting to protect the Social Housing Grant, which means that housing associations - and local authorities - will be able to continue their progress in developing more social homes for people and communities for another year.

In its scrutiny of the draft budget, the Local Government and Housing Committee also recognised that affordable housing supply was a key priority - but that barriers remained "...to delivering new affordable homes, including material cost increases and supply chain and workforce issues".

It also noted that progress against the target to build 20,000 new social homes for rent in the current Senedd term was an “issue of great interest”, which it remained committed to monitoring. As housing associations play a key role in delivering some of the homes towards this target, we welcome this focus on progress monitoring by the committee.

On this area, Elly added: "Welsh Government’s unprecedented investment in the social housing grant is really positive.

"But the systems and structures that all homebuilders rely on are still delaying people and communities getting new homes. Inflation is still affecting materials and supply chains, reducing what government grant can buy; there continues to be reduced skills in the workforce, an overwhelmed planning system, and a competitive land market.

"In the short term, investment to bring new homes forward quickly through acquisition and capitalising on modern methods of construction offers a significant opportunity. Innovative projects like the 12 new modular homes delivered on an old car park in Newport by Linc in partnership with the local council and Zed Pods have been crucial in providing places for people to live in a way that directly meets local communities’ needs.

"In the medium and short term, we need support to improve systemic issues around local authority capacity and access to land in order to really shift the dial.

"Ending the housing crisis is an imperative. There is huge potential for housing associations and others to not just build more housing, but build the right housing in the right places for the people of Wales now and for many years to come. We need a commitment to change the way things work to make this happen."

Building safety

In reviewing the provision for building safety in the draft budget, the Local Government and Housing Committee welcomed the funding and the work that has already taken place, adding: “...However, we recognise that it continues to be a very worrying time for people living in the affected buildings and also for leaseholders who are landlords. The uncertainty faced by those affected remains a concern to us and we believe the Welsh Government should provide details on the position of remediation plans for high-rise residential buildings across Wales."

Responding, Elly said: “We welcome the focus from the committee on the importance of ensuring timely and adequate funding for building safety remediation - this is absolutely vital to keeping affected tenants safe.

“Housing associations and other social landlords have and continue to take decisive action to ensure high rise buildings are safe. However, it is important that the legislation that Welsh Government intends to bring forward in future is equally funded at an appropriate level".

Homelessness and housing support services

When the draft budget was announced in December, we were extremely disappointed to see that the Housing Support Grant - the primary mechanism for preventing homelessness and supporting independent living in Wales - had been frozen.

Over the past decade, funds for these services have endured cuts and freezes which means that - if you compare the current budget in real terms to the budget in 2011/12, once inflation is taken into account, the fund of £139m for 2011/12 equates to approximately £191m today. The Housing Support Grant announced in the 2024/25 draft budget is £24m less than this.

Ahead of the draft budget announcement, we shared our Housing Matters campaign findings with Welsh Government that demand had hugely increased on 2022/23, and the complexity of needs had grown massively. CHC and Cymorth also warned that, in the event of the cash flat settlement which has now been proposed, 77% of service providers had told us they would be extremely likely or likely to reduce capacity, 40% would be extremely likely or likely hand back contracts and 67% would be extremely likely or likely not to bid for contracts.

The Local Government and Housing Committee has expressed serious concern about the "unprecedented number of people currently living in temporary accommodation in Wales and the severe resourcing pressures this causes support services".

It has also called for Welsh Government to make "providing additional funding for the Housing Support Grant allocation ahead of the final budget a priority and should explore all possible options for doing so".

We remain firm in our stance that if we want to make progress on ending homelessness for good in Wales, services need to be sustainably and fully funded to ensure they can reach everyone at risk of or experiencing homelessness in Wales.

Commenting, Rhea Stevens, CHC head of policy and external affairs, said: "We recognise how challenging the budget is for all public services in Wales, however unless we take action and protect our vital homelessness and housing support services, the crisis will continue to deepen for many people and families across the country.

“We urge Welsh Government to reconsider the cash flat settlement, and ensure that the Housing Support Grant is properly funded in line with inflation so that we are able to protect these vital services.

“The support that housing associations and other homelessness services across Wales provide is life-changing. If we don’t see a funding increase in the final budget, the fact of the matter is that we know we are likely to lose services at a time they have never been more needed."