Welsh Government final budget 2024/25: what it means for social housing in Wales
As Welsh Government publishes its final budget for 2024/25, Community Housing Cymru’s policy team analyses the key points that will impact housing associations and the wider social housing sector in the year ahead.
While Welsh Government’s final budget remains largely unchanged from the draft budget announced in December 2023, today brought some additional positive news for the social housing sector.
The climate change budget has been increased from the £2.84bn announced in the draft budget to £2.87bn - a total increase of £24.86m, which includes:
an additional £5m on top of the £365m previously allocated to the Social Housing Grant in the draft budget;
an additional £5m for the Homeless and Prevention budget line, which the Housing Support Grant sits within; and
a further £14.43m for local authorities through the Local Government settlement.
Overall, Welsh Government's decision to increase capital investment in housing priorities in challenging economic times demonstrates a strong and clear message that it is seeking to support the social housing sector to deliver safe, warm and affordable homes over this Senedd period. However, we still need clarity on key areas to ensure that the people of Wales can access the affordable homes that they need.
Affordable housing supply
The total capital investment in the Social Housing Grant programme now sits at £370m for 2024/25. Welsh housing associations are currently building 70% of social homes and this funding boost will support them to continue this progress.
Whilst this additional investment is welcome, we will continue our work with Welsh government and other key partners to develop tangible solutions to unblocking systemic barriers to development.
Building new homes is the ultimate solution to the housing crisis but the systems and structures that all homebuilders rely on are delaying people and communities getting new homes. Inflation is still affecting materials and supply chains, reducing what government grant can buy; there continues to be reduced skills in the workforce, an overwhelmed planning system, and a competitive land market.
The Senedd Local Government and Housing Committee has recently announced that it will undertake an inquiry into social housing supply. We see this as a crucial step towards providing vital social housing, and welcome the opportunity to contribute our ideas for change.
Homelessness and housing support
The final budget includes a welcome increase of £5m being allocated to the Homelessness Support and Prevention budget line (total £219.91m), which includes the Housing Support Grant.
We were clear in the run up to this announcement that if we did not see an enhanced funding settlement for the Housing Support Grant, there would be insufficient funding for frontline workers to be paid fairly and we would likely lose services at a time they have never been more needed. As a priority, we will continue to work with Welsh Government to ensure that as much additional funding as possible is allocated to the Housing Support Grant.
Longer term, it is absolutely essential that there is a sustainable, multi-year funding settlement for the Housing Support Grant that protects investment in these vital services and frontline staff.
Financial support for households
Many of these commitments remain unchanged from the draft budget, as Welsh government seeks to maintain support for those hit by the cost of living crisis:
the Discretionary Assistance Fund (DAF) has been maintained at £38.5m;
support for advice services and the budget for the Single Advice Fund has been protected;
£35m funding has been maintained for the Fuel Poverty Programme;
while £25m has been maintained for the Welsh Government Energy Service.
The budget also restores £5m of funding for the Children and Communities Grant which seeks to support disadvantaged and vulnerable children.
Building safety
No change has been made to the budget on this area (£165m for 2024/25) from the draft announcement, which saw the building safety fund being reprofiled and £37m of capital being released in revenue funding for the year ahead.
Decarbonisation
No changes have been made to the £70m which was previously ring fenced for the Optimised Retrofit Programme in the draft budget. Welsh Government has, separately, committed £18m for Welsh Housing Quality Standard (WHQS) works for 2024/25.
The social housing sector is still awaiting a decision on the long term approach to the funding of WHQS 2023, however. Housing associations are already playing their part in helping Wales reach its net zero goal. Across the country they have implemented innovative solutions to decarbonise homes which work for their communities - but they will not be able to progress this further without essential tools and funding.
We need a sector-wide solution that builds on the work that housing associations have already done to decarbonise the homes they manage, takes advantage of technology, develops a Wales-based supply chain and provides an economic boost to our communities.
Read our full member briefing to find out what Community Housing Cymru will be doing next to ensure housing associations and tenants are fully supported now and for many years to come.
