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Affordable housing is a priority for local authorities and Government, with £3.3 billion being invested between 2004 and 2006, and further increases planned. Most local authorities believe, however, that they will not meet the need for affordable housing in the next three years.

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This was the key finding of a study undertaken by the Audit Commission and the National Audit Office (NAO) which investigated the strength and efficiency of the delivery chain in place to improve the balance between housing availability and demand.

The study highlights the challenges the government and local agencies face in addressing the key issue of providing the large number of affordable homes which are needed.

High prices and a shortage of housing available at a reasonable price, particularly in the south of England, have made it increasingly difficult for people to find a home that they can afford. This lack of affordable housing has two major consequences: key workers, such as nurses and teachers, can be priced out of the market in some parts of the country; and people can find themselves living in unreasonable accommodation.

The study, published today, shows that good progress is being made to increase the number of affordable homes and to build them more efficiently. The Housing Corporation delivered almost 29,000 new affordable houses in 2004-5 against a target of 27,000.

However, the study outlines further improvements that need to be made throughout the delivery chain, especially through speeding up planning applications and strengthening skills within key organisations, particularly local authorities. The study also found that changes made by the Office of the Deputy Prime Minister to the delivery chain have generated a lack of clarity about roles and relationships.

The study recommends a number of ways to address these obstacles: while most local authorities in high demand areas have prioritised affordable housing they will need the support of the community to improve matters.

In order to achieve this, local authorities need to work with housing associations and developers to provide a clear message to local communities about the need for affordable housing. Some local authorities are achieving this very successfully but many are yet to take up this community leadership role fully.

Another recommendation suggests public sector bodies that have large land holdings should help by disposing of this land for affordable housing rather than selling land to the highest bidder. In the past this did not often happen, usually land was sold to the highest bidder. The Register of Public Sector Land is improving this situation, but more needs to be done to ensure the effective transfer of surplus land to other agencies.

“To address the shortage of affordable housing, ODPM has set ambitious targets to increase the supply.

“But there remain a number of areas where central and regional bodies can provide better leadership, guidance, clarity and co-ordination. More houses could be built more quickly and a streamlining of the delivery chain would help the Department meet its commitments under the wider Efficiency Programme.”

Audit Commission Chairman, James Strachan said:

“People deserve the right to live in homes that meet their needs. This target is of enormous importance to many key workers and people who are increasingly finding it difficult to afford appropriate accommodation. While progress is being made, building more affordable homes remains a huge challenge. We must make sure that we are making the best use of all available resources. Recommendations made in this report will help the government to work towards achieving this important target.”

NAO Comptroller and Auditor General, Sir John Bourn


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