Spending Review 2021 departmental supplement: Department for Levelling Up, Housing and Communities (DLUHC)

This supplement to the LGA’s Spending Review submission sets out further proposals which we would like to work with the Government on implementing. It should be read together with the main submission which also contains proposals relevant to various Government departments.


Planning is vital to delivering a range of national priorities such as house-building, economic recovery, place-shaping, achieving net zero, enabling healthy lifestyles, and levelling-up. Councils are committed to ensuring new homes are built and residents have quality places to live.

It is essential that national and local government work together to ensure that any proposed reforms of the planning system are deliverable and improve outcomes for our communities, in addition to seeing benefits from housing growth. However, there are currently planning rules that simply do not work at the frontline in delivering on these ambitions. The Planning Bill provides a once-in-a-generation opportunity to secure reforms which will deliver safe, prosperous and healthy places for generations to come. We want to work together with the Government to get any changes to the planning system right.

We need a planning system that is not just focused on delivery of high-quality homes, but also about improving the communities where they are built. This means provision of infrastructure upfront, making sure that homes address local need and ensuring sustainability. It is also crucial that housing is not planned in isolation but considered alongside economic growth and jobs. Underpinning all of this is the need for a locally-led and properly resourced planning system in which councils and the communities they represent have a say over the way places develop. Despite the 20 per cent national increase in planning fees in January 2018, other funding sources subsidised £195 million of expenditure on development control in 2019/20.

Planning must be founded on local, democratic input, as reflected in recent LGA polling which reveals that eight in 10 residents want to be able to have their say on all new homes built in their local community. Councils are enablers of housing growth, with councils approving nine in 10 planning applications. Despite this, there are more than 1.1 million homes given planning permission over the past decade yet to be built and one million homes allocated in Local Plans but not yet brought forward for planning. Councils need the tools to both require and incentivise landowners and developers to build high quality homes in a timely way once planning permissions or local plan allocations are given.

If building beautiful homes are to gain resident support, they need to be both high quality and in the right quantity. They need to meet local needs, be well integrated with and improve local communities, have the right infrastructure - not just roads but schools, green infrastructure, parks, and health facilities and be sustainable. All too often poor developments, insufficient or poorly implemented infrastructure and inappropriate permitted developments have undermined public support for much needed homes. We need a reset and councils are keen to work with government to get these critical reforms right.

Our proposals include:

  • Committing to properly resourcing the planning system and the transition to any new system. This means giving councils the ability to recover the full costs of processing applications, through locally-set fees. The additional 20 per cent fee increase consulted on in 2017 should be introduced as soon as possible, alongside a pilot programme to test self-financing models through local fee setting. Councils will also need the necessary resources to upskill or hire new staff to undertake the transition process locally and then implement the new planning regime alongside developing a new design guide.
  • Continuing to fund and support the work of the Planning Advisory Service (PAS) who undertake work with local planning authorities using the principles of sector-led improvement. A £3 million annual funding commitment will be critical to helping councils engage with and understand government planning reforms and to improve plan-making, decision-making and delivery.
  • Replacing national permitted development rights by locally-determined permitted development rights. If national permitted development rights are retained, policies in areas with an up-to date adopted local plan should take precedence in decision-making. Any development undertaken through permitted development rights should be subject to locally-determined infrastructure and affordable housing contributions.
  • Allowing councils to levy a council tax ‘stalled sites premium’. This would apply in respect of dwellings which could have been built on a site, but where, after a reasonable period of time, a housebuilder has not begun construction, or where construction rates are lower than agreed. This would provide a mechanism to incentivise landowners and housebuilders to bring long-standing unbuilt sites into use or sell the site on to someone who would.
  • Ensuring the new Infrastructure Levy is able to secure the infrastructure needed to deliver local plans. The provision of supporting infrastructure for housebuilding is a key issue across the country, and particularly in areas of high housing growth. It will be vital for any future Infrastructure Levy to be set locally rather than nationally, and be non-negotiable, to enable sufficient financing to deliver the necessary infrastructure as defined in a local plan. For this levy to be effective, viability will need to be removed as a material planning consideration.


During the COVID-19 pandemic, councils responded rapidly to support people experiencing homelessness through the Everyone In initiative. Councils have supported over 37,000 individuals through this initiative, with more than 26,000 now moved on to longer-term accommodation. This demonstrated that given powers and funding, councils, working with their partners, can end the vast majority of rough sleeping.

We want to work with the Government and partners across the sector to build on this progress as we recover from the pandemic so that all rough sleepers have a chance to lead a safe, secure and successful life off the streets.

More broadly, we would like to work with the Government to improve the preventative response for households at risk of homelessness, including those at risk of rough sleeping, to enable them to sustain their housing and live happy, healthy and prosperous lives. This also means ensuring that households in temporary accommodation (now in excess of 95,000 households) can be moved into settled housing.

To achieve local and national shared ambitions on ending rough sleeping and preventing homelessness in the first place we need:

  • An explicit, national-level focus on homelessness prevention work, and an associated funding regime, that enables and encourages councils to avoid residents reaching crisis and reduces the demand for emergency responses. This should recognise that prevention requires a combination of action from national government, local government, and their partners in the public, VCS, and private sector, including access to health services such as mental health and substance misuse and links to the criminal justice system, among others.
  • Government’s homelessness policy to be focused on the key drivers of homelessness through increasing the supply of genuinely affordable housing, tackling welfare-related poverty and developing an integrated prevention approach.  
  • Multi-year, joined up and flexible funding, with local homelessness strategies acting as the vehicle through which homelessness funding is delivered. This should be delivered as a single, flexible fund via councils which is usable across public services towards a shared definition of ‘homelessness prevented’, and supported by joined-up funding across central government departments for local agencies. Funding homelessness services in this way would also support staff retention, long-term strategic planning and joint commissioning.

Unlocking land for development by councils

The cost of land for development can be prohibitive for councils and they often cannot compete against private developers and landowners. The physical availability of land and predominance of small sites are also considered as barriers to development by councils. Where councils are able to develop sites - whether through direct delivery or in partnership with third parties, they are able to inject drive to ensure housing is delivered to meet local needs at pace.

The One Public Estate (OPE) programme has provided eight phases of revenue funding to councils, incentivising councils and other public sector partners to fast-track opportunities to rationalise the public estate. By March 2021 the OPE programme had delivered over £461 million in capital receipts for local and central government asset owners, realised over £100 million in reduced running costs, released land for over 20,000 homes, and supported over 32,000 jobs. We need to build on the success and value of the OPE programme. Awareness of OPE funding amongst councils and estate owning public bodies is high, with the pipeline of further projects to reduce the public estate growing as public bodies change ways of working and delivering public services in response to the pandemic.

In addition, the OPE programme administers the cost-effective Land Release Fund (LRF). Three rounds of capital funding, comprising a total investment of over £100 million, are supporting councils to bring forwards surplus public land for housing delivery at speed. Such surplus land typically suffers development constraints blocking delivery for housing - increasingly surplus sites are arising from completed OPE projects that have supported the rationalisation of council estate. The first homes from LRF supported sites are now in occupation. The most recent LRF round in spring 2021, the Brownfield Land Release Fund, saw approximately £70 million of fundable land release schemes come forward for a £50 million pot of funding, demonstrating the appetite for the fund and the existence of an investable, oven ready pipeline of LRF projects able to deliver much needed housing and support local economies across the country.

However, activity to identify, release and repurpose public sector land would be far more effective if it could be planned and delivered through a longer-term programme approach, as opposed to the current annual process where significant OPE programme team resource is used each year to bid for further funding. A three-year funding award would enable the OPE programme to use a greater proportion of the public funding it receives on directly supporting project delivery. 

Similarly, councils and other public bodies would be more assured to plan and develop a solid pipeline of projects with the certainty of a three-year programme of funding. Councils would be incentivised to invest more extensively in property development and housing delivery capacity.

We are calling for a three-year, £180 million investment (£60 million each year) in further phases of the One Public Estate (OPE) programme, to include further rounds of the Land Release Fund (LRF).

We are also calling for councils to be given new flexibilities to acquire public land identified as surplus or redundant by the current public sector owner in their area, to provide public facilities, including housing, at the valuation determined by the district valuer based on current use. 

Building safety

Fire safety measures

Councils want residents to be safe and to feel safe in their homes, ensuring social housing meets the new standards arising from the reform of building safety in the wake of the Grenfell Tower fire and meeting the recommendations of the Inquiry into the fire. LGA-commissioned research by Savilles estimated that the total costs to deliver compliance with the highest safety standards, including the installation of sprinklers and compartmentation across the entire HRA council housing stock at £8.1 billion over a 10 year period, with the majority of the investment taking place in the first five years. To achieve full compliance with current standards alone is estimated to be a total of £2 billion over the same period. These costs include the remediation of dangerous cladding.

Local authorities are generally being denied access to the building safety remediation funding which was announced last year in relation to dangerous non-aluminium composite material (non-ACM) cladding. This should be changed.

Building Safety Bill burdens

Councils face ongoing costs under the Building Safety Bill proposals in employing building safety managers, providing safety cases and other costs under the new building safety regime for higher-risk buildings. These come on top of the early review of many fire risk assessments required by the Fire Safety Act, the implementation of Grenfell Tower inquiry recommendations in relation to lift and fire door checks and other new safety standards and the costs arising from the proposals in the consultation on Personal Emergency Evacuation Plans (PEEP), which was accompanied by an inadequate impact assessment, primarily because it ignored the likely substantial costs of work arising from the PEEP process.

Where private landlords are able to increase rents to cover these costs, councils’ ability to do so is limited by Government and statute. We are calling on the Government to confirm that these costs will be recognised as new burdens and as such be fully funded – a failure to do so will impact councils’ ability to deliver new homes and better homes in line with Government ambitions.

In addition to the above costs, the Building Safety Bill Impact Assessment estimates an increase in costs on an EAC basis for local authority building control authorities of between £6.8 million and £12.4 million and for Environmental Health services between £2.3 million and £3.8 million each year.

Some of these costs will be offset by the cost-recovery mechanisms set out in the Bill, but the significant costs of recruiting and upskilling staff are unlikely to be included in the estimate above and we are concerned whether the approach to cost recovery will result in all regulatory costs being covered. We understand DLUHC is considering the costs involved, but at present we have no estimate of them.

The expanded roles for local authority building control and environmental health under the Building Safety Bill will also require investment in capacity and competence. A failure to cover these costs will undermine the effectiveness of the Bill (as had been the case with existing legislation). 

Joint Inspection Teams

The Building Safety Regulator will not begin operations before Spring 2023 at the earliest. In the meantime, the Government has funded and the LGA hosted a Joint Inspection Team to support councils in taking enforcement action against dangerous high rise residential budlings. This funding needs to continue at least until the BSR comes onstream and probably for at least a further year if residents are to continue to be protected. Depending on the number of inspections DLUHC wants the JIT to carry out and the amount of additional training it provides, the cost of the JIT will range from £1 million to £2 million each year.

Parks and green spaces

Parks provide a cheap and cost-effective way to get people active, reduce obesity, boost mental wellbeing, and strengthen immune systems. At the same time, they can help act as green corridors for wildlife, refuges for pollinators, act as sustainable drainage systems, and mitigate the impact of air pollution. 

The way in which parks are funded has changed significantly over time. Since 2010 core council funding has reduced by over £250 million and the reliance on commercial income, fees and charges has increased. This income has dropped to near zero during the pandemic.

The Government has already committed to spending £2 billion in this Parliament on cycling and walking: we must ensure that as with London’s Green Chain Walk and Thames Path our parks and green spaces are connected to these plans. During the lockdown period, many people used their hour of exercise to enjoy our public parks and green spaces, with Sport England data showing 30 per cent of people being more active during this time. 

However, the pandemic has hit those from more deprived backgrounds and the BAME community hardest, whether that be through deaths, digital poverty or unequal access to green spaces to exercise.

Small scale, affordable initiatives to help the nation’s parks and green spaces recover and flourish can add up to a major impact on our nation’s health, environmental footprint, and resilience. 

We are calling on the Government to introduce a local, flexible £500 million Green Parks Fund to help unlock such initiatives, with a £450 million capital element and an ongoing revenue commitment of around £50 million.

Examples of initiatives to improve parks and green spaces that could be funded through the Green Parks Fund

Examples of initiatives to improve parks and green spaces that could be funded through the Green Parks Fund
Initiative Details Estimated cost
Parks Activation funding Creating jobs for ‘community park rangers’ to help ‘activate’ our green spaces and deliver more community health focused outcomes such as green prescriptions, activities and volunteering, linking into those sections of society who need more reassurance to use our green spaces.  

£30 million revenue funding

Meadow creation A transformation fund for the creation of pollinator-rich grassland meadows on current areas of close mown grass in parks and open spaces, as referenced in the 25-year environment action plan and Defra’s bees needs campaign.

£10 million capital funding

Playbuilder + Capital funding for the refurbishment of play facilities and removal of accessibility barriers to encourage active play for all ages as part of the anti-obesity strategy. £300 million capital funding (based on 10 play areas per council)
Quality Parks (in partnership with Green Flag Award) Capital and revenue funding to transform parks into Green Flag Quality Standard green spaces delivering community cohesion, health and wellbeing, or climate mitigation outcomes. £50 million capital and revenue funding (100 parks)
Green Space Protection (in partnership with Fields in Trust) A national campaign for community-led protection of green spaces with funding for legal and dedication costs, allowing landowners to donate to our nation’s health and green future similar to post-war donations of historic buildings to what became the National Trust.

£1 million revenue funding

Emergency Parks Fund Emergency revenue funding to support parks through the current challenges, including emergency repairs to existing equipment and paths to embed active habits acquired during lockdown £500,000 revenue funding


Regulatory Services

Ahead of the 2020 spending round, the LGA, with the professional bodies for environmental health and trading standards, published a submission highlighting the challenges within these important public protection services. Six months in, the COVID-19 pandemic had already highlighted the demands placed on the relatively small number of staff tasked with leading the compliance and enforcement response to COVID in addition to a wide array of business as usual activity, including important new duties to support British businesses in the post-transition economy.

It is very positive that the government listened to the LGA’s call last Autumn to take a government wide view of the pressures on local regulatory services, with DLUHC convening a cross-Whitehall regulatory services task and finish group to look at a range of issues including the demands on the services; resources and capacity; cost recovery and funding, and how to ensure a coordinated approach across government.

This has been a helpful exercise and the Government should maintain the cross-government view it has provided going forward.

The work of the task and finish group confirmed worrying trends that the LGA and others have been warning of for several years: an ever-growing list of enforcement demands being placed on the service against a backdrop of an ageing workforce that is shrinking due to both retirement and retention issues, with the loss of officers to other sectors and agencies common and exacerbated by COVID-19. Added to this, councils are experiencing challenges in recruitment, with a limited pool of professional capacity available and an increasing gap between filled and advertised posts. They also find it difficult to bring in new officers through available routes such as apprenticeships due to a lack of funding for training posts and challenges in ensuring available management and operational time for mentoring new officers.

In short, there are real concerns about the current and future resilience of the services, at a time when it has become clearer what an important contribution they make - not just in terms of COVID, but also towards a much wider set of public health and economic objectives that are crucial to building back better, including:

  • supporting local businesses, particularly micro businesses, to understand the legal and compliance frameworks in which they operate
  • ensuring businesses comply with a range of environmental measures designed to help the UK meet its obligations to reduce environmental impacts and tackle climate change
  • overseeing a range of new measures designed to improve people’s health and by extension reduce health inequalities
  • ensuring the quality and safety of our housing stock, in relation to the private rental sector and post-Grenfell building safety reforms.

The task and finish group recommended the creation of a government funded programme to support the recruitment and employment of apprentices within regulatory services by covering the salary costs for new apprentice roles, replicating equivalent schemes in other sectors.

This type of scheme would support the Government’s broader public sector growth plan for apprenticeships and can also make a contribution to other government priorities.  Environmental health, trading standards and licensing are highly localised services that are necessary everywhere, from major conurbations to smaller towns and the countryside, rather than geographically concentrated in certain areas. Increasing employment opportunities for apprentices by providing additional support for salary costs will help to create skilled roles and employment opportunities throughout the country, contributing to the levelling up agenda.

The LGA supports this recommendation and urges the Government to take this first step to mitigate the risks to future capacity in environmental health and trading standards.

Although helpful, this step in itself will not be enough to reconcile the capacity/demand challenge. We are therefore reiterating our call for government to investigate how updated fees and new models of funding can help to support services while reducing the burdens on taxpayers.

Supporting councils through sector-led improvement

Sector-led improvement (SLI) is an approach put in place by councils and the LGA to support continuous improvement.  It has become a vital part of the assurance framework for the Government in assessing the state of local government and addressing issues as they arise. 

The approach was inaugurated in 2011, providing an alternative to the top-down and bureaucratic national performance framework which it has been estimated cost the Government nearly £2 billion a year. In contrast, DLUHC provides annual grant of less than £20 million to support sector-led improvement. 

The approach enables councils to improve themselves and pays for itself several times over. For every £1 of government grant for sector support we are able to save councils at least £5 and for some programmes it is significantly higher, particularly when taking into account uncosted efficiencies and indirect benefits. It is consistent with the principle of local accountability for results.

One of the major advantages to sector-led improvement is its flexibility. In the midst of the COVID-19 pandemic, the offer was revised to provide relevant support to councils responding to the crisis and is now also providing tools and materials that will aid councils through the recovery. Throughout lockdown, development work on the climate change and digital security programmes has continued at pace.

There is no doubt that more councils are starting to struggle with the impact of funding cuts and dealing with the COVID emergency. Sector Led Improvement comes into its own when councils need additional support or intervention. The LGA has worked in partnership with government and councils to provide and commission support for councils in intervention, helping government to assess the needs of councils and aiding councils in understanding the requirements of central government. This directly helps government save money in commissioning and supervision costs as well as smoothing the process.

The record of sector-led improvement is impressive, but it could be further enhanced if the grant from DLUHC was awarded on a multi-year basis. As a recent independent review of SLI by Shared Intelligence concluded, the current annual grant settlements drive a short-term focus constraining both the impact of SLI and the sector’s ability to evidence that impact. This is not compatible with the reality that action to influence councils’ effectiveness, improvement and innovation is not a quick fix. The annual cycle also mitigates against securing meaningful sector engagement in shaping the SLI offer.

A longer-term settlement for sector-led improvement would facilitate a longer-term view of the impact of sector led improvement. This would allow SLI to deliver outcomes planned over a longer timeframe, giving councils the certainty they need that sector led improvement will be there to support them over the next three years.

We call for a three-year settlement for sector led improvement for councils to allow this vital work to continue.