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MPs tell MHCLG to ditch ‘false’ housing scheme promises in scathing report

  • 09/12/2020
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MPs tell MHCLG to ditch ‘false’ housing scheme promises in scathing report
The Public Accounts Committee has slammed the Ministry of Housing, Communities and Local Government (MHCLG) for “serially” scrapping housing schemes for first-time buyers.


In January of this year, the department confirmed it dropped the Starter Homes scheme it pledged in 2015 after failing to deliver any of the 200,000 discounted properties promised. 

The homes were to be sold to first-time buyers under the age of 40 at a 20 per cent discount and 85,000 people registered their interest 

Instead £173m was spent under the scheme to acquire brownfield sites and land which was then sold to developers for general housing, with only a third of the 6,600 homes built meeting the definition of affordable. 

The Public Accounts Committee (PAC) report said the scheme’s reliance on developer contributions for funding was part of an “opaque, complex mechanism” which risked less money being available to local authorities for housing and infrastructure. 

The PAC also drew similarities between the scrapped Starter Homes scheme and the more recently announced First Homes scheme which was part of the Conversative party’s manifesto in November 

The newer scheme pledged to give first-time buyers a 30 per cent discount on homes in their local area with the discount to be passed on during the resale of the property 

The committee said the government were yet to clarify when the properties under the First Homes scheme would be available for purchase, despite a promise to deliver 300,000 new properties a year by 2025. 

So far, the MHCLG does not have a timeframe for when homes will be built through the First Homes scheme but told PAC it aims to deliver 1,500 within the “next couple of years” which it hopes to learn from before planning further. 

The report said MHCLG were “unable or unwilling” to say how it would achieve the building of the new homes and added there was an “alarming blurring” of the definition of affordable housing.  

The PAC proposed the department write to it within three months detailing how many homes of each tenure were expected and how many would be defined as affordable. 

Additionally, PAC asked the MHCLG to write within a month with a “clear definition” of what it considered to be affordable as well as whether the homes would be for sale, shared ownership or rent. It also suggested that the department take into account whether the concept of affordable housing differed depending on location and circumstances. 

The report also recommended the department clarify which active schemes would contribute to the goal of 300,000 homes per year. 

Furthermore, MHCLG was asked to be open with Parliament and the public when policies have changed or been abandoned to avoid uncertainty and disappointment. 

Meg Hillier MP, chair of the Public Accounts Committee, said: “The Department for ‘Housing’ is at risk of losing the right to the title. It has serially, constantly failed to deliver affordable new homes or even make a serious attempt to execute its own housing policies or achieve targets before they are ditched, unannounced – costs sunk and outcomes unknown. 

“MHCLG needs to ditch instead the false promises and set out clear, staged, funded plans, backed by the necessary laws and with a realistic prospect of delivering.” 

“It also needs to ditch what is becoming a hallmark lack of transparency, if it is to have any hope of rebuilding confidence among future tenants and owners that the decent, safe, affordable homes they want and need will ever be built,” she added.  

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