NAO says MHCLG needs to clearly set out its purpose and ambitions

The Ministry of Housing, Communities & Local Government (MHCLG) has committed significant resources to addressing the UK’s housing shortage, reflecting an evolving strategy to unlock land and accelerate housebuilding.

Over the last decade, MHCLG has allocated £10.5 billion through several land unlocking programmes, with the ambitious projection of creating capacity for 713,000 new homes. Despite this financial commitment, to date only 33,300 homes – representing five percent of the projected total – have been completed on sites directly supported by these initiatives. A notable issue identified by the National Audit Office (NAO) is the absence of systematic tracking by MHCLG and Homes England of the ultimate number of homes delivered on all unlocked land, a gap the government now seeks to address.

Looking forward, MHCLG will launch the National Housing Delivery Fund (NHDF) from April, consolidating existing unlocking programmes under a single, expanded framework with a budget of £21 billion. The NHDF is designed to function as a comprehensive gateway for all ministry support related to housing delivery and will establish a dedicated housing bank under Homes England, anticipated to be operational from April 2026. This strategic approach is critical as the government works towards delivering 1.5 million new homes by July 2029.

Since 2016-17, MHCLG and Homes England have committed £8.4 billion to 768 projects, covering a spectrum from major schemes – such as 20 large projects each supported with over £100 million – to smaller interventions averaging £1 million or less. Completion rates vary significantly, with 36 percent of projects initiated between 2016 and 2021 having finished their unlocking works, compared with only three percent for projects funded since 2021. Many of these projects are expected to continue through 2034, with some housing delivery stretching to 2050.

The complexity of preparing land for development, often staged and dependent on multiple funding sources, means the sector offers extensive partnership opportunities for contractors, developers, and investors. Recent policy refinements include a move towards continuous market engagement, allowing project bids at timings suitable for local market readiness, as well as revised assessment criteria prioritising projects that serve deprived communities or deliver environmental benefits.

The NAO report underscores the need for MHCLG to articulate explicit objectives and performance measures for the NHDF, implement robust long-term monitoring and evaluation, and clarify funding priorities – especially in relation to local government dynamics and transparency in area selection. A coordinated risk management framework across MHCLG, Homes England, and delivery partners is also deemed essential for securing value for money and increasing private sector confidence.

Suppliers, subcontractors, and principal contractors stand to benefit from active engagement with the MHCLG’s evolving investment programmes. Businesses should monitor the imminent publication of detailed NHDF guidance and its implications for procurement, project selection, and regional funding priorities, as these will directly influence market opportunities in unlocking new housing supply across England.

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