Michael Gove’s department returned £1.9bn of housing money to the Treasury claiming it was unable to spend it, leaving industry insiders baffled.
The sum comprised money to pay for new house building projects, including affordable homes, and to conduct building safety remediations.
Joshua Bond, founder and managing director of Bond Land, called Gove’s move “the latest blow to housing developers” following scrapped housing targets last year.
He pointed to a failure to reform the planning system as one of the main problems for the sector – and one of the plausible causes of the department’s decision to hand back the money to the Treasury.
House building has indeed slowed down consistently this year. Housing activity fell for the fourth consecutive month in June, according to data from S&P and the Chartered Institute of Procurement and Supply.
But building safety remediations, some of which are already underway, would have benefitted from governmental funds.
David Smith, Head of Property Litigation at JMW Solicitors, said that the money could have been directed “to the large number of properties that are crying out for building safety improvements”. He added these funds could have been used to fix buildings under 18m which are not covered by the current remediation scheme.
A Department for Levelling Up, Housing and Communities spokesperson explained that this money is part of “multi-year funding programmes that are being spent flexibly”.
“Some money can be moved into future years depending on demand and the wider economic climate”, they added. They also confirmed the department remains fully committed to funding and delivering its house building programmes.