Response to the fiscal commission

Evidence from Midland Heart on behalf of the West Midlands Housing Association Partnership

About the West Midlands Housing Association Partnership (WMHAP)

Housing Associations that have a vested interest in the West Midlands have formed a partnership to engage and support the West Midlands Combined Authority (WMCA) to deliver on a range of objectives to ensure the region thrives as a place to live and work. WMHAP has been formed to provide a single voice the help the WMCA to deliver against its social and economic aims through housing and relates activities such as employment as health.

The partnership represents circa 120,000 homes and a workforce of 18,500. Together these organisations build thousands of homes and add £600m to the regional economy.

How would greater fiscal freedoms be used to improve economic performance and competitiveness (especially in relation to immigration, skills and wages).

The West Midlands Strategic Economic Plan sets out a number of ambitions around securing land for development and regenerating communities. Central to this is an ambition to deliver an additional 200,000 homes by 2030.

One of the principal means in enhancing the Economic performance and competitiveness of the West Midlands will be through infrastructure spending. The competitiveness of the economy depends upon strong transport connectivity, robust digital network, and excellent local public services.

Our view is that housing should be given a similar status to other elements of infrastructure spend in the region, and any financial freedoms given to the Combined Authority to raise revenue, should consider how resources should be used to deliver more affordable housing and/or ensure land suitable for housing is made viable.

The value of housing infrastructure is already clear. The National Housing Federation has calculated that for every £1 of spend on housing, £1.42 is generated in the local economy. It produces a strong supply chain, providing opportunities for employment and training in vital skills, often suites to trades for apprenticeships. For every one affordable home created, 2.4 jobs are created. A greater supply of housing boosts local economies, supports the retaining of skilled employees within the region and will help to reduce the incidence of homelessness.

Housing providers in the West Midlands are committed to working with the incoming Mayor to help grow the local economy, create jobs and deliver vital affordable housing. We believe that a similar vein to which the region seeks to entice inward investment from multi-national companies to locate to the region, the Combined Authority alongside the Mayor should consider creating an ‘investible proposition’ i.e. developing the right conditions to entice the housing sector to build in the West Midlands region, as opposed to other regions of the UK.

The ‘investible proposition’ may be developed through a number of policy tools, including a common strategic vision for housing (spatial plan) across the Combined Authority, setting expectations on numbers, tenure and archetype, an understanding of how the Combined Authority will promote the use of land remediation funds, an understanding of the Mayor’s involvement in grant funding allocations from the HCA and/or any funds raised for housing through any further levy of business rates. As part of an investible proposition a consistent, simplified and standardised planning framework will also be critical to the success of a suitable housing infrastructure programme, including a full and transparent criteria for ensuring developments include an element of affordable housing.

We believe there is significant potential for WMCA to enhance competitiveness through investing in programmes that will enable housing associations to increase their rate of development and upscale delivery of new homes. This investment could be particular beneficial to the West Midlands where the creation of apprenticeships and the regeneration of estates would have the biggest impact on the prospects of local residents.

What benefits in terms of jobs and inclusive growth could be delivered if the West Midlands had a greater say in how spending is financed and how that finance is used?

In its most simplest of terms, this goes to the very heart of devolution. The theory of devolution is that localised institutions should be more adept at being able to determine the barriers to economic growth and therefore should be empowered to make the key spending decisions to overcome these barriers.

The Combined Authority has already determined a number of priorities for spending in respect of transport and connectivity which it believes will deliver achieve greater economic impact than perhaps projects decided in Whitehall.

What is clear however it that democratic capacity will be required in the office of the Mayor, to ensure that citizens both understand the powers of a Mayor, their ability to raise resources and how such resources will be employed to the benefit of the region.

From a WMHAP perspective, Housing Associations are uniquely placed to exploit new investment opportunities to create jobs and promote inclusive growth. The benefits of new housing creation are not limited to employment creation and are much broader than the benefits gained from other types of infrastructure. For example, new homes contribute extra revenue to local authorities through increasing the Council Tax base of the local authority and through any continuing provision of the New Homes Bonus.