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The National Audit Office issued a report on housing in England on 19 January 2017.
Its head was quoted in the press release:
“The need for housing in England has in recent years grown faster than its supply, and housebuilding needs to increase across the country. The government has responded to this by putting in place a range of policies to increase housing supply and home ownership. Central to this is an ambition to increase the supply of housing by one million homes by 2020, largely through support to private housebuilders. Delivery of this target will not require a substantial increase in current levels of housebuilding.
Amyas Morse, head of the National Audit Office, 19 January 2017”
This gives the comforting impression that the needed increase in supply is going to be met. So everything’s all right then.
Except that one million homes will not reduce the housing shortage, because it will not even match increasing demand. The National Audit Office report “Housing in England: overview” concerning the Department for Communities and Local Government does not mention this detail, even though it includes figures which would make it obvious.
“1.11 Housebuilding between 2011 and 2015 did not keep pace with demographic projections. Across England as a whole, it has been estimated that approximately 54% of the homes that were needed, according to the Department’s 2012-based household projections, were actually built.
The Department’s most recent projections imply that an additional 227,000 households will form in England each year between 2011 and 2021; substantially higher than the annual average of 166,000 extra homes in England over the last 10 years. Since 2011, the cumulative gap between the number of homes built and the number of households being formed has increased by 370,000.7
Footnote 7 reads: “The 2014-based household projections show an increase of 1,215,000 households between 2011 and 2016. There were 756,570 net additions to dwelling stock in the five years from 2011-12 to 2015-16, a difference of 368,000.”
I make it a difference of 458,000, unless the figures for the projected increase in households have been transposed and should be 1,125,000.
That is the estimated difference between the increase in demand and the increase in supply in five recent years, i.e. the increase in the housing shortage in that period.
However, the million is just an arbitrary figure. A million would not even accommodate the additional 227,000 households a year that the Department projects. Therefore the existing shortage that increased by 370,000 in the last 5 years alone will go up, not down.
This report appears to be propaganda, merely intended to confirm that the government’s ambition is achievable, even though they can see it is insufficient.
There is no indication of why the NAO has undertaken this work, which has avoided doing what the NAO is supposed to do. Its remit is described on page 2:
“Our vision is to help the nation spend wisely. Our public audit perspective helps Parliament hold government to account and improve public services.
The National Audit Office scrutinises public spending for Parliament and is independent of government. The Comptroller and Auditor General (C&AG), Sir Amyas Morse KCB, is an Officer of the House of Commons and leads the NAO, which employs some 785 people. The C&AG certifies the accounts of all government departments and many other public sector bodies. He has statutory authority to examine and report to Parliament on whether departments and the bodies they fund have used their resources efficiently, effectively, and with economy. Our studies evaluate the value for money of public spending, nationally and locally. Our recommendations and reports on good practice help government improve public services, and our work led to audited savings of £1.21 billion in 2015.” (Emphasis added.) That was my understanding of its role.
However, paragraph 3 states that “This report is designed to provide an overview of the housing market in England, the overall, cross-cutting public policy landscape, and the Department’s housing strategy. We have not assessed the merits of the government’s objectives or the value for money of any individual programme supporting these objectives. We do, however, comment on the ability of the government to achieve its ambition of delivering one million new homes. In addition, we seek to provide clear information on the housing landscape and the Department’s housing objectives. We aim for this report to lead to future studies that focus on particular aspects of housing policy, building on the work that we, and the Committee of Public Accounts, have carried out on the implementation of housing-related policies in recent years.” (Emphasis added.)
It looks like the NAO is as independent of the government as Mark Carney and the OBR are.
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