The National Audit Office has made scathing criticisms of government efforts to build more affordable housing.

The public spending watchdog says the government’s Affordable Homes Programme has a forecast shortfall of 32,000 in the number of homes delivered when compared to the 2016 and 2021 targets.

Additional problems now include building cost inflation and shortages of materials and labour, making current targets hard to meet.

The NAO says that the government forecasts it will eventually achieve 96 per cent of its 2016 target for housing starts, but some of these homes will not be built until 2032. 

Specifically the NAO found that the government’s key housing department – the Department of Levelling Up, Housing and Communities – had inadequate oversight of the Greater London Assembly’s house building programmes for several years.

In a statement the NAO says the DLUHC has started to make improvements to its governance and oversight, including in data and performance reporting.

More generally the NAO says there is a lack of strong incentives for housing providers to deliver affordable homes in areas of high housing need or in the most unaffordable areas. 

“The Programme is not delivering a high proportion of affordable homes in areas that the Department assesses have high general housing need. In addition, housing providers are delivering fewer homes in more unaffordable areas, measured by the difference between local house prices and wages” says the National Audit Office.

Before the end of 2022, the NAO recommends that the DLUHC should develop plans to mitigate the risk that the objectives for delivering affordable homes may not be achieved, and continue to improve its oversight of the targets and building programme.

Gareth Davies, head of the NAO, says: “Since 2015, the Department for Levelling Up, Housing & Communities has made improvements to the running of the Affordable Homes Programme, but there are still areas it needs to address.

“It should reassess targets to ensure the Programme is delivering affordable homes in areas that need them the most. It should also use the Programme to bring about greater value to other parts of government, and advance wider efforts around net zero.”