PAC report highlights the vital role of affordable housing in alleviating the homelessness crisis

A Public Accounts Committee (PAC) report, published January 2025, calls on the Ministry of Housing Communities and Local Government (MHCLG) to set clear targets for affordable homes; hopefully creating new impetus for investment in the affordable housing market.

The role of a PAC is to assess whether policy is being carried out effectively and economically and it is an important aide to governmental transparency in the spending of public funds. A PAC Report, whilst only advisory, is considered influential both on the Government departments reported on, but also on public opinion; their findings often making headlines.

The PAC's remit in producing the January 2025 report, was to assess the government's approach to tackling homelessness and evaluate the strength of the current strategy; as well as identifying areas where policy could be bolstered.

Whilst the primary focus of the PAC was to look at how local authorities are set up to tackle homelessness and housing insecurity in their districts, amidst the ongoing homelessness crisis, one finding, with perhaps even broader implications, was that the crisis is being aggravated by a severe shortage in housing supply and especially affordable housing. 

The Committee commented, and MHCLG agreed that, 'a significant ramping-up in affordable housing supply, beyond individual strategic sites, would be needed to make a substantial impact on homelessness levels'. It was also noted that such ramping up would be especially important to alleviate the pressures in areas where homelessness, or the risk of homelessness, is especially acute, and housing supply falls short of rising demand. Indeed, the Committee reported that the lack of affordable homes is leading to some local authorities funding temporary housing, including in B&Bs, which Sir Geoffrey Clifton-Brown MP, Chair of the Committee, likened to 'attempting to save a sinking ship with little more than a leaky bucket'. 

The Committee found that one of the principal obstacles to generating new housing is the 'viability of sites'. Unfortunately, this concept of 'viability' was not elaborated on. However, MHCLG committed to producing a strategy early in 2025 that will cover actions across the whole industry such as 'working with developers; building up the role of SMEs in developing property; and enhancing the capacity of local planning authorities to handle cases' all of which may be considered drivers to site viability. 

One recent change to the National Planning Policy Framework (NPPF), which is intended to drive up new housing delivery (including affordable housing stock), is the introduction of a 'grey belt' classification. This grey belt land is part of the green belt which is determined as suitable for redevelopment (owing to the quality of the land) and which will be required to have 15% more affordable housing than required in the local housing policy - subject to a cap of 50%. 

This is actually a change that was walked back from a proposed 50% affordable housing requirement for all grey belt sites. This concession was justified on the grounds that a blanket 50% requirement would risk more sites being deemed as not viable. As such, it appears that a compromise on a minimum affordable housing requirement would lead to greater utilization of grey belt sites and thus lead to more affordable housing being built in the long term. 

We reported on this aspect of the NPPF in our recent affordable housing development update from January 2025 here.

To assist local authorities in reviewing green belt land and identifying areas that may properly be deemed as grey belt, and therefore suitable for redevelopment, an extra £100m will be made available to councils for the purpose of hiring staff and consultants to carry out site assessments. 

This change to the NPPF provides useful insight into one way that the Government intends to tackle the housing crisis. 

Nevertheless, the PAC noted that it was frustrating that more detail on the broader MHCLG strategy was not forthcoming including, crucially, the number of social housing units that would need to be built; it is hoped that the comprehensive strategy, when published, will provide clarity on these targets; which will provide a clearer metric by which to judge the strategy's success.

If you have any queries on this or other Affordable Housing issues, please contact a member of WBD's Affordable Housing team, linked above. 

This article was also authored by Callum Pringle Swain, Paralegal at Womble Bond Dickinson.