DLUHC annual report and accounts 2022 to 2023: Foreword and performance summary

Updated 2 August 2023

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It was a great honour to return to the Department for Levelling Up, Housing and Communities as Secretary of State in October 2022 and again head up one of the most critical missions in government.

The United Kingdom is an unparalleled success story – a multi-cultural, multi-national, multi‑ethnic state with world-leading scientific, tech, arts and service sectors. Yet while talent exists in every part of the UK, opportunities do not. Our priority is to put that right. Where geographical areas have previously been overlooked, DLUHC’s job is to help them thrive so that dynamism and innovation drive growth throughout the country, bringing more jobs and opportunities for all.

I am also proud to lead the vital work of upholding the Union which is so significant to the lives of people across the UK, including Scotland, Wales and Northern Ireland. With my ministerial and departmental colleagues, I look forward to building on the work of my predecessors, Greg Clark and Sir Simon Clarke, and thank them for their leadership during the period covered by this report.

In 2022-2023, DLUHC has distributed government money to transform areas most in need, including £2.1 billion through the second round of the Levelling Up Fund, £818 million via the Towns Fund and the first payments awarded under the £2.6 billion UK Shared Prosperity Fund.

Our commitment to hand over more power to local leaders saw flagship devolution deals signed with Greater Manchester and West Midlands. These give the two mayors – respectively Andy Burnham and Andy Street – greater control over budgets for transport, employment, housing, innovation and net zero, and the ability to spend money according to local need.

Elsewhere, we have moved ahead with incentives to power economic growth, generate private investment, create jobs and boost productivity. Our Levelling Up Partnerships will provide bespoke, place-based regeneration in 20 areas. We also committed to deliver 12 Investment Zones over the next five years, offering tax and customs incentives for each area to the tune of £80 million. Finally, we opened all English Freeports and – in a boost to our partners in the Devolved Administrations – announced four further freeports, two each in Wales and Scotland.

We continue to work with the Devolved Administrations (DAs) to deliver on the priorities of people in every part of the UK. In September 2022, representatives from the DAs joined ministers and council leaders in Orkney for the inaugural meeting of the Islands Forum – created to hear the voices of island communities and collaborate on shared opportunities and levelling up challenges. In November, the Prime Minister became the first in 15 years to attend the British-Irish Council, in Blackpool.

As well as transforming communities the government remains committed to delivering 300,000 new homes per year. DLUHC is also focused on improving the quality and safety of individual homes, recognising the danger of poor living conditions. During the year, the inquest was held into the tragic death in 2020 of two-year-old Awaab Ishak, who contracted a lethal respiratory condition due to damp and mould in his social housing flat. This should never have happened: Awaab and his family were unforgivably and inexcusably let down. We are pushing ahead with ‘Awaab’s Law’ to introduce a legal requirement for social landlords to tackle damp and mould – part of a range of measures in the Social Housing Regulation Bill.

As well as social tenants, private renters can struggle to persuade landlords to fix problems and to seek redress from them. During the year we committed to introduce the Renters (Reform) Bill, which will abolish no-fault evictions and create a new Ombudsman to help settle disputes, while supporting the many landlords who supply decent homes to evict tenants who exhibit antisocial behaviour.

I have also been delighted to see progress in remediating unsafe buildings. The decision of top mortgage lenders to start offering mortgages to those living in homes with cladding from January 2023 eased financial worries for many. We have ensured that most developers have now agreed to pay over £2 billion to fix building defects identified after the devastating Grenfell Tower fire. I will continue to hold them to account for their responsibilities to leaseholders.

Levelling Up is not delivered by DLUHC alone. We work with other departments to transform the lives of citizens: notably in education and transport; in productivity and other ways that benefit society – including our new Anti-Social Behaviour (ASB) Plan.

This will ensure that perpetrators face swift justice, increased fines, and enhanced drug testing. Stamping out ASB is central to levelling-up: you cannot restore pride to places if people do not feel safe there. We will deliver the hotspot enforcement and immediate justice ‘trailblazer’ elements as soon as possible: new police and enforcement patrols in areas with the highest ASB rates, and offenders ordered to pick up litter or remove graffiti while wearing high-viz vests.

In the coming year, housing remains a priority: ensuring that more people have safe, decent, affordable homes. As Minister for Intergovernmental Relations as well as Secretary of State for Housing, Communities and Local Government, I am committed to driving progress for UK citizens everywhere – levelling up, maintaining the Union, and ensuring everyone has a place they are proud to call home.

The Rt Hon Michael Gove MP

Secretary of State

Department for Levelling Up, Housing and Communities

I’m delighted to have joined DLUHC, a Department that makes a genuine difference to people’s lives right across the United Kingdom – supporting the Government’s central mission of levelling up and getting homes built. The Department has seen significant change over the past year across our wider ministerial team, senior officials and our Non-Executive Directors, including Dame Alison Nimmo’s appointment as Lead Non-Executive Director. I want to pay tribute to my predecessor Jeremy Pocklington and his contribution to the Department over 5 years first as a DG and then as Permanent Secretary since 2020. I look forward to building on this in our work on housing, local government, levelling up and the Union.

Our teams have continued to provide government funding to areas most in need: £2.1 billion through the second round of the Levelling Up Fund, £818 million through the Towns Fund, and awarding the first payments of the multi‑year £2.6 billion UK Shared Prosperity Fund. The Anti-social Behaviour Action Plan was also published this year, a milestone in stamping out anti-social behaviour and restoring the right of people to feel safe in, and proud of, their local area. We are working hard to deliver our commitments to benefit people all around the country – launching the new Islands Forum, as well as ensuring that our Freeports policy reaches the whole of the UK, including Firth of Forth and Cromarty and Inverness.

We have continued to devolve power to local leaders across England, including through two trailblazer devolution deals in Greater Manchester and West Midlands. Our work is directly supporting local communities, creating jobs and opportunities, as well as ensuring people can be proud of where they live.

We secured an increase of £5.1 billion in core spending power for local government in 2023-24, recognising significant pressures they face in delivering essential public services. Establishing a new Office for Local Government will provide accessible data and analysis about the performance of local government, and support improvement. We are implementing the Building Safety Act, a significant part of our response to the Grenfell Tower fire. By March 2023, 46 developers had agreed to pay over £2 billion to fix building defects. We have been focused on delivering decent, as well as safe housing, introducing the Social Housing Regulation Bill to ensure social housing landlords are tackling poor housing conditions.

We also launched our cross-government strategy to set out how we will end rough sleeping for good, which included a commitment to invest £2 billion over three years. Working closely with Home Office, colleagues continue to deliver a pioneering cross-government programme, providing homes to individuals and families fleeing the conflict in Ukraine, and have supported over 100 000 Ukrainians since March 2022.

None of these achievements would have been possible without the work of colleagues across DLUHC. I am proud that we have continued to strengthen our presence throughout the country, with 48 colleagues working from the Darlington Economic Campus, which pioneers cross government working, and with over 200 colleagues working from the Wolverhampton office, which has topped the government office experience survey. Our digital, data and technology function was rated as the highest scoring in the annual functions survey run by the Cabinet Office, and we will continue to drive a data driven approach across our policies.

We have much to do in the coming year and I look forward to continuing to support our Ministers, working with colleagues across the whole Department.

Sarah Healey CB CVO

Permanent Secretary

Department for Levelling Up, Housing and Communities

The department has had another busy and successful year, demonstrating commitment and resilience, during a time of extraordinary change, to Levelling Up our country, providing high quality homes and supporting our communities.

In October we welcomed back our current Secretary of State, and our new Permanent Secretary joined in February. We also welcomed a whole new ministerial team. In terms of the Non-Executive team, we marked the departure of Dame Mary Ney DBE and thank her for her deeply valuable contribution over her six-year term. Tom Taylor joined us, bringing extensive experience and accounting knowledge to bolster the Non-Executive team generally and our Audit & Risk Committee specifically.

Colleagues from across the department have made progress in delivering on many core government priorities, with a major legislative programme, including The Building Safety Act and deeper devolution; and significant funding to support high streets, Levelling Up, housing delivery and tackling homelessness. DLUHC has also been right at the heart of the Government’s response to the war in Ukraine, working closely with local government, Devolved Administrations, and the charitable sector to deliver on the Homes for Ukraine scheme which launched in March 2022.

The Ministerial Board held two formal meetings, one in London and one in Wolverhampton, during the reporting year. The Board discussed several issues, including the department’s priorities for the term ahead, lessons learned from the department’s response to the war in Ukraine and our legislative programme. The Board also received updates from the Secretary of State, Permanent Secretary and Non-Executive Directors on departmental issues.

The Non-Ministerial Board met four times this year. As with previous years, this provided the opportunity for the Non‑Executive Directors to challenge, scrutinise and support a very engaged and open leadership team. The department’s delivery performance has been scrutinised and assurance provided to the permanent secretary with a focus on the Outcome Delivery Plan, monthly Departmental Performance Report and a structured programme of Governance Assurance Panels, programme deep dives and reviews – all chaired by a Non-Executive.

The Audit and Risk Assurance Committee (ARAC) formally met five times during the reporting year. The ARAC received papers on the internal and external audit programmes as well as the department’s quarterly risk report.

The Non-Executive Directors will continue to utilise their experience to scrutinise, support, challenge and help shape the department to ensure confidence in the management of the DLUHC and the delivery of its programmes.

Dame Alison Nimmo

Lead Non-Executive

The Annual Report is made up of the Performance Report, the Accountability Report and the Financial Statements which together set out the progress we have made in 2022-23 to deliver our strategic priorities, how we have used the resources voted to us by Parliament and our detailed financial accounts. This section provides a summary of our purpose, how we have performed against the department’s defined strategic priorities and our key risks. It also highlights the impact of significant events on the delivery of these priorities such as economic challenges and the invasion of Ukraine.

The Department for Levelling Up, Housing and Communities (DLUHC) is at the forefront of supporting people, places and communities. We deliver a fairer housing market, level up and spread opportunity and prosperity equally across country, bind the four parts of our United Kingdom closer together and give more power to local people to shape their areas. We strive to ensure people have access to affordable, high-quality housing, boost opportunities for jobs and growth in all parts of the UK, build strong communities, support effective local government and create opportunity for everyone, regardless of where they live.

The Secretary of State heads the department’s ministerial team, who are accountable to Parliament. They are supported by the Permanent Secretary who has executive responsibility for the department and for safeguarding public funds as the Accounting Officer, supported by the Executive Team. During the year, DLUHC also had two second permanent secretaries reporting to the Accounting Officer until the start of March 2023.

Our non-executive directors provide an important external perspective to the department but do not have decision‑making or spending powers. For further details please go to the Governance Statement on page 52, which sets out the department’s governance structures in more detail.

The department had five priority outcomes which set the context for our delivery in 2022-23, supported by our strategic enablers.

We are committed to levelling up and we continue to invest in places and our local communities, regenerating our town centres and high streets, boosting local economies – while also facilitating stronger, more empowered local leadership.

We are delivering a wide-ranging programme of activity to create, fund and drive a market that delivers good quality, sustainable homes, and empowers local areas to create communities where people want to live, work and do business.

We are driving the biggest changes in building safety for a generation – undertaking an expansive programme of work to reform the buildings system, remediate problems in the existing buildings stock and make lasting and meaningful change through stewardship.

We are driving the delivery of government’s priorities to strengthen the Union and improve the quality of intergovernmental engagement.

We are delivering a sustainable funding settlement and developing better approaches to improve long term outcomes for people and places, through greater accountability and transparency, and more effective support for reform to help the sector face future challenges; and working to successfully deliver elections.

We continue to strengthen our corporate centre and functional performance to enable the delivery of our strategic priorities. This includes a continued focus on ensuring we have skilled, diverse and high-performing people, who are supported and trusted by empowering and inclusive leaders.

Agreed trailblazer devolution deals with Greater Manchester and West Midlands combined authorities, transferring more power over levers for growth and level up infrastructure, alongside single funding settlements from the next Spending Review.

Allocated £3.8 billion in Levelling Up funding through 216 successful bids for projects to boost town centres, transport and cultural heritage. This is supported by a £65 million package to help local authorities with the resources for delivery.

Approved all UK Shared Prosperity Fund Investment Plans in December 2022, with investment payments made to all 256 places in England, Scotland and Wales, in addition to the core Northern Ireland allocation.

232,820 net additions to the housing stock.

Launched the £500 million Local Authority Housing Fund in December 2022 to fund over 3,000 homes in response to local housing pressures arising from the conflicts in Afghanistan and Ukraine, with a further £250 million announced in March 2023.

240,000 new homes to rent and buy started since 2015 through the 2015-23 Affordable Homes Programme, including 123,000 outside London. 2022-23 data will be available later this year.

Amended the Social Housing Regulation Bill to empower the regulator to hold landlords to account and introduce professional qualifications to improve sector standards and tackle unsafe housing conditions. Introduced a 7% cap on social housing rent increases for 2023-24 to protect social housing tenants.

Re-opened the Building Safety Fund against a new risk methodology - PAS 9980 - in July 2022.

£1.85 billion allocated for the remediation of non‑Aluminium Composite Material (ACM) cladding in high-rise residential buildings, as of 31 March 2023.

46 developers signed developer remediation contracts, legally committing them to fix defects in the buildings they were involved in developing. These works are estimated to cost over £2 billion.

Brought in the interim uplift to Part L (conservation of fuel and power) of the Building Regulations in June 2022, so homes are now expected to deliver around 30% less carbon emissions than those built to previous standards.

UK Government hosted the 38th Summit of the British Irish Council in November 2022, a key forum for intergovernmental relations established by the Belfast/Good Friday Agreement.

Worked across government and with the Office of National Statistics to improve the availability of coherent UK-wide data and evidence, reflecting commitments set out in the UK Concordat on Statistics.

Established two Green Freeports in Firth of Forth and Cromarty and Inverness in Scotland in January 2023. Announced the Celtic and Anglesey Freeports in Wales in March 2023, and working on options for a Freeport in Northern Ireland.

Delivered a Local Government Finance Settlement for 2023‑24 that makes available up to £59.7 billion for local government in England, an increase in Core Spending Power of up to £5.1 billion or 9.4% in cash terms on 2022-23. This included £2 billion in additional grant for social care.

Helped 63,000 families in 2022-23 through the Supporting Families programme, improving outcomes and building stronger communities.

Made 14 pieces of secondary legislation to implement the Elections Act, which received Royal Assent in April 2022, and launched the Voter Authority Certificate digital service ready for the first elections requiring Photo ID in May 2023.

Launched a digital service to support the Homes for Ukraine Scheme within two weeks and developed this to support safeguarding and funding.

Implemented the first phase of our Delivery Improvement Plan developed with the Infrastructure and Project Authority (IPA), including launching a new Project Delivery Hub, strengthening internal assurance over major programmes and continued investment in our project delivery capability.

Successfully secured funding through our Budget 2023 work with HMT, resulting in substantial new investments in Levelling Up and Social Housing in particular.

Rated the highest scoring department for Digital, Data and Technology in the Cabinet Office led annual functions survey.