Combined Authority accused of ‘artificially inflating’ affordable homes figures

A letter released to the Local Democracy Reporting Service under the Freedom of Information Act suggests that the Combined Authority is struggling to prove to the government that it is playing a significant role in the delivery of 540 homes – more than quarter of the progress it needs to demonstrate to fulfil its target.

The Combined Authority was told it would receive £100 million to deliver 2,000 affordable homes as part of the 2017 devolution deal.

It is using just a small fraction of that – £760,000 – to account for more than a quarter of the target, arguing it is funding “infrastructure improvements preventing flood risk” at Northstowe, enabling the second phase of the new town’s planning permission to be granted.

Of the 3,500 homes contained in the planning permission for that site, the Combined Authority said 1,750 would be designated affordable, and construction would start on 540 in time for its deadline.

To meet the terms of the devolution deal, it would take an average of £50,000 to aid the delivery of each affordable home in the programme. For those at Northstowe, the Combined Authority would have managed a contribution of just £1,400 per affordable home delivered.

A letter from a Ministry of Housing, Communities and Local Government (MHCLG) official, sent on June 8 this year, says that so far, the Combined Authority has not been able to “evidence the additionality” of the investment at Northstowe contributing to its affordable housing programme – raising the possibility that not all of those 540 homes, if any, are going to count.

Such a decision would leave the Combined Authority short of its target.

The letter reads: “Discounting some or all of the units for this scheme reduces the projection for end of 2020/21 significantly and, irrespective of any decisions around the programme end date […] we consider that evidence of further delivery progress is required before we can consider releasing further funding for the programme.”

MORE: Mayor ‘tops out’ £100k homes but it will be September before his combined authority vote to get eligibility criteria ‘spot on’Liberal Democrat Aidan Van de Weyer, who has been selected by his party to challenge for the mayoralty in the election next summer and is currently deputy leader of South Cambridgeshire District Council, criticised the Combined Authority over the issue.

Cllr Van de Weyer said: “I am concerned that the Combined Authority seems to be fiddling its figures. The investment it has made in Northstowe is not actually bringing forward any additional houses.

“It looks more like a way of artificially inflating the figures to give the impression that the Combined Authority is on the way to meeting its target of creating 2,000 affordable homes, when it isn’t.”

And the leader of Cambridge City Council, Labour’s Lewis Herbert, also appears to doubt if the Northstowe homes ought to be counted as the product of the Combined Authority’s affordable housing programme.

“It’s questionable whether the Combined Authority’s money was the real difference here,” he said.

A Combined Authority spokesperson responded by saying neither South Cambridgeshire District Council nor Cambridge City Council “were going to put their hands in the pockets to make [Northstowe Phase Two] happen”.

The Combined Authority and its Conservative leader Mayor James Palmer, claim the 2,000 target will be met on time.

A letter from the minister for regional growth and local government, Conservative Simon Clarke MP, sent on July 13 this year and leaked to the press days later, said the government takes a “differing view” to the Combined Authority on its affordable homes figures.

But the letter referencing Northstowe is the first from MHCLG indicating the reasons for the disagreement to be made public.

It was also revealed last month that government concerns have led it to withhold some of the funds for the programme – £15 million expected last year, with concerns over a further £30million expected this year.

Mr Palmer said in a public meeting last month that the issue relates to differing interpretations of the completion date for the programme between his authority and the government, saying MHCLG officials have said construction should start on the 2,000 homes by March 2021 instead of March 2022 – but concerns have been raised that there are more substantial problems.

Labour councillor Jocelynne Scutt said in a Combined Authority meeting in July that she had heard that the government concerns relate to the use of £40 million of the total £100 million, which has been set aside in a separate pot, not for spending but instead for lending to deliver affordable housing, thereby creating a rolling fund. So far the £40 million revolving fund has contributed only a small number to the 2,000 target.

But the mayor said he was not aware that his authority’s use of that £40 million is an issue, and insisted he plans for his authority to meets its targets.

Cllr Van de Weyer now says “James Palmer’s Combined Authority should focus on maximising the number of affordable homes that it can provide with the cash that it has, not pursuing foolish ideas that will only bring forward a very small number of houses”.

If the government discounts the 540 homes at Northstowe, it could be that the Combined Authority will not meet its target, potentially jeopardising further funding for affordable housing in the county.

Another email released under the Freedom of Information Act, sent on June 15, from the director of housing development at the Combined Authority, Roger Thompson, to an MHCLG official, says the Combined Authority’s affordable housing budgetary commitments are “already well in excess of the money we hold, which starts to raise issues,” and asks for assurances that all the funding will be provided.

In response to the points raised in this article, a spokesperson for the Cambridgeshire and Peterborough Combined Authority told the Local Democracy Reporting Service said: “Cambridgeshire and Peterborough Combined Authority is working with the Ministry of Housing, Communities and Local Government (MHCLG) to resolve some queries around the affordable housing programme.

“The programme currently has a very strong pipeline of further housing scheme opportunities that the Mayoral Combined Authority intends to support in the next few months. The Mayoral Combined Authority has always understood and advised that the programme end date was March 31, 2022, being five years from the establishment of the Mayoral Combined Authority and is in a positive dialogue with MHCLG to resolve this and to secure payment of further instalments of the £100 million of funding.

“Our current cashflow position on the contracted housing programme is fully covered by the funding already received. We have highlighted to MHCLG that with our strong pipeline of opportunities it would be reassuring to know that the balance of the funding will be available to us shortly so the programme targets can be delivered.

“At Northstowe we have completed a grant agreement with Homes England for the start 540 homes by March 2022, for which the flood remediation works being funded by the Mayoral Combined Authority have to be completed as a planning condition before those new homes can be occupied.’’

In response to the comments made by the Liberal Democrat and Labour councillors, the Combined Authority spokesperson said: “It’s easy for the opposition to criticise our investment into Northstowe when neither South Cambridgeshire District Council nor Cambridge City Council were going to put their hands in the pockets to make it happen.

“Without the works funded by the Cambridgeshire and Peterborough Combined Authority, no Northstowe Phase Two homes could have been occupied; the Mayoral Combined Authority once again providing a solution when others find only problems.

“Under Mayor James Palmer, the Cambridgeshire and Peterborough Combined Authority is bringing about innovative solutions to help end the housing crisis, like our £40m Revolving Fund, Community Land Trusts and £100k Homes. If anyone else has any new, deliverable ideas for more affordable housing that isn’t just ‘more money, more grants’, we will happily hear their proposals.

“The old approach hasn’t worked, and no-one outside the Mayoral Combined Authority has anything new to say.”

The Local Democracy Reporting Service put the content of the information released under the FOI, along with a number of questions seeking clarification and to comment on the issues raised to the MHCLG.

A spokesperson said: “Officials continue to work with the CPCA on the delivery of its affordable housing programme to better understand progress against the original case for investment. This is part of the Department’s ongoing monitoring of the implementation of devolution agreements with Mayoral Combined Authorities.”