Corporate report

DLUHC annual report and accounts 2021 to 2022: 1. Foreword and overview

Updated 8 August 2022

Annual report and accounts 2021 to 2022 - links to all sections

1. Foreword and overview
2. Performance analysis
3. Accountability report
4. Financial statements

Foreword from the Permanent Secretary

2021-22 saw the creation of the new Department for Levelling Up, Housing and Communities. As a new Department we have a clear purpose: to level up communities across the entirety of the UK. It is a bold and exciting mission, designed to positively impact the lives of millions of people in communities all over the country. We have similarly taken on responsibility for strengthening intergovernmental working to deliver effective outcomes for citizens across the UK.

This year we published the ambitious and visionary Levelling Up White Paper, which is our plan to spread opportunity more equally across the UK. It outlines the twelve medium-term missions to anchor Government policy to 2030; our plan for systemic changes within and outside central Government such as devolving new and deeper powers to more local leaders; as well as the policy programme and initiatives which are making this happen. We have not started from scratch on delivery, and have accomplished much across the United Kingdom over the last year. We’ve announced the first round of Levelling Up Fund and Community Ownership Fund projects at the 2021 Spending Review; saw the first freeports become operational; made 101 Towns Deals worth £2.35 billion, and committed £830 million to 72 high streets under the Future High Street Fund.

It has been five years since the terrible tragedy at Grenfell Tower and the Department welcomes the passing of the Building Safety Act, which protects leaseholders and makes those responsible fix the cladding crisis. We continue to support the Grenfell Inquiry as it draws to an end later this year.

We also saw a 9% reduction from the previous year in people sleeping rough on a single night; delivered £3 billion to councils for core and discretionary council tax rebate scheme to alleviate cost-of-living for citizens; and continued supporting communities throughout the pandemic.

And of course, we are shocked and saddened by recent events in Ukraine. The Department launched the ‘Homes for Ukraine’ scheme, working closely with the Home Office to provide thousands of homes to individuals and families fleeing the conflict. I am proud of the dedication, professionalism, and resilience of our people to make this happen, and we stand ready to support Ukraine and its people going forward.

Inside the Department we welcomed a new Ministerial Team, and an expanded Executive Team in-line with the Department’s new role. As we emerge from COVID, I am particularly energised to continue momentum on the Places for Growth programme. I am proud we opened our second headquarters in Wolverhampton, which now has over 230 staff in place; alongside establishing a presence at the Darlington Economic Campus. Overall we have increased staff based out of London by 46% in 12 months. This is great progress, and is allowing us to be more connected to the people and places we serve.

I am excited and optimistic about the Department’s strengthened purpose and our full-plate of delivering the Government’s priorities in the period ahead.

Jeremy Pocklington CB

Permanent Secretary

Department for Levelling Up, Housing and Communities

Lead Non-Executive Director’s Report

The 2021/22 year was a busy one for the department, with change being a defining theme throughout. Transforming into the Department for Levelling Up, Housing and Communities (DLUHC) with a new Secretary of State and ministerial team has brought with it the ambitious and exciting new agenda to Level Up the United Kingdom.

To support the new agenda and new responsibilities, changes have also been made to the Non-Executive team, alongside changes to the structure of the department. The department appointed three new additional Non-Executive Directors over 2021/22, namely Jeff Dodds, Gary Porter and me, bringing in skills and experience from across different sectors and industries to help support and challenge the department’s work. We also saw the departure of Michael Jary from the Non-Executive team after three years as our Lead Non-Executive Director. We thank him for his excellent contribution to the department’s governance as he moves on to a new role as the government-wide Lead Non-Executive Director.

Board meetings and sub-committees

The Ministerial Board held formal meetings twice during the reporting year helping to bring clarity to the department’s priorities during the period when DLUHC was newly established. The Board discussed several issues including DLUHC’s term ahead, the Housing and Regeneration missions set out in the Levelling Up White Paper, Ukraine and Building Safety. It also received regular updates from the Secretary of State and the Permanent Secretary, who offered clear direction and outlined their core priorities.

The Non-Ministerial Board formally met three times during the reporting year. This provided the opportunity for the Non-Executive Directors to challenge and support the department’s delivery against its Outcome Delivery Plan and Departmental Performance Report.

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.

Involvement of the Non-Executive Directors

The Non-Executive Directors have made important contributions to the department over the reporting year. This included:

• providing assurance to the department’s Accounting Officer by chairing Governance Assurance Panels, to review the effectiveness of governance arrangements, internal controls and risk management ;

• monthly meetings with the Chief Financial Officer to examine the Departmental Performance Report in greater detail, identifying areas that require additional support to increase delivery confidence;

• providing periodic advice for the Secretary of State, most notably to examine budget allocations and spend/delivery confidence for the next fiscal year on specific programmes; and

• frequent, complementary meetings between Non-Executive Directors and members of the Executive team throughout the year. This included weekly meetings between the Lead NED and Permanent Secretary, as well as support for Director Generals with ad hoc and specific issues throughout the year - through both portfolio and delivery boards, and regular bilateral meetings.

The Non-Executive team are excited and positive about the changes to the department. Seeing the Levelling Up agenda being fully embraced shows a commitment that is particularly encouraging. The Non-Executive Directors will continue to utilise their experience from both private and public sector to scrutinise, support, challenge and help shape the department to ensure confidence in the management of the department and delivery of its programmes.

Alison Nimmo

Interim Lead Non-Executive Director

1. Performance summary

Overview

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 2021-22 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 any impact on the delivery of these priorities as a result of the department’s response to the COVID-19 pandemic and the UK’s transition following the exit from the EU.

Our role and purpose

The new Department for Levelling Up, Housing and Communities (DLUHC) was established during the year with a core mission of levelling up opportunity across the United Kingdom, under a new Secretary of State. The formal transfer of functions order for the Machinery of Government Change was successfully passed on 8 December, bringing together the Ministry of Housing, Communities and Local Government (MHCLG) with other functions previously undertaken by the Cabinet Office.

DLUHC aims to create great places to live and work and give more power to local people to shape what happens in their area. We strive to ensure people have access to affordable and high-quality housing, boost opportunities for jobs and growth in all parts of the UK, build strong communities, strengthen the Union, support effective local government, create opportunity for everyone, regardless of where they live, and sustain our democracy.

How we are organised

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 Principal Accounting Officer, as well as a second Permanent Secretary who reports to the Principal Accounting Officer.

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

Our Priority Outcomes

The department established four priority outcomes for our Outcome Delivery Plan and our work in 2021-22, supported by strategic enablers. During the year, we added a fifth outcome to reflect the department’s new responsibility for the Union and Constitution, as a result of Machinery of Government changes.

1. Raise productivity and empower places so everyone can benefit from levelling up

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 giving communities a strong voice to take over cherished local assets.

2. More, better quality, safer, greener and more affordable homes

We are delivering a wide-ranging programme of activity to create, fund and drive a market which will deliver 300,000 homes a year sustainably by the mid-2020s, and at least a million new homes by the end of this parliament – while also driving the biggest changes in building safety for a generation.

3. End rough sleeping through more effective prevention and crisis intervention services, and reduce homelessness by enabling local authorities to fully meet their statutory duties

We are building on the significant progress made during the pandemic to support the most vulnerable in society, investing more to prevent homelessness and to drive reductions in rough sleeping in local areas by providing accommodation and tailored support.

4. A sustainable and resilient local government sector that delivers priority services and empowers communities

We are delivering a sustainable funding settlement for future years 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.

5. Ensure the benefits of the Union are clear, visible and understood by all citizens; and reforming the constitution and sustaining our democracy

We are driving the delivery of government’s priorities to strengthen the Union and we are working with local authorities to successfully deliver the elections and constitutional policy.

6. Strategic Enablers

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.

Our Highlights for 2021-22

Raise productivity and empower places so everyone can benefit from levelling up

• Published the Levelling Up White Paper in February 2022 - a flagship document that sets out how we will spread opportunity more equally across the UK, and comprising a bold programme of systems change, including 12 UK-wide missions to anchor the agenda to 2030, alongside specific policy interventions that build on the 2021 Spending Review to deliver change now.

• Made tax incentives available in 7 Freeports, where Teesside and Thames Freeports became operational benefitting from both tax incentives and customs facilitations, providing local businesses with a comprehensive package of measures.

• Allocated £1.9 billion throughout the UK in the first round of Levelling Up Fund, Community Renewal Fund and Community Ownership Fund, to regenerate our town centres and high streets, support individuals into employment, improve local transport links and invest in local culture, and supporting communities to take over cherished local assets.

More, better quality, safer, greener and more affordable homes

• Continued to support economic recovery and help the housing industry to build back better following the pandemic. Annual net additions in 2020-21 totalled 216,490 homes and we remain on track to deliver 1 million homes across 2019 to 2024.

• Reset the government’s approach to building safety, restoring proportionality in the system; protecting leaseholders from bearing costs of remediation and mitigating fire risks; ensuring industries at fault pay; and holding to account individuals and companies who have, and continue to, knowingly put lives at risk.

• Made further progress with the remediation of unsafe Aluminium Composite Material (ACM) cladding with 452 (94%) of all identified high-rise residential and publicly owned buildings in England having either completed or started remediation work at the end of March 2022.

End rough sleeping through more effective prevention and crisis intervention services, and reduce homelessness by enabling local authorities to fully meet their statutory duties

• Invested £800 million this year, and committed a further £2 billion over the next 3 years to tackle homelessness and rough sleeping.

• Committed £375 million through the Homelessness Prevention Grant to support local authorities in tackling homelessness, with a further £316 million to be made available to local authorities in 2022-23. This funding will seek to deliver the government’s commitment to ensure people at risk of becoming homeless, across the country, get help more quickly.

• Provided councils across England with £203 million under the Rough Sleeping Initiative. This funding provided up to 14,500 bed spaces and 2,700 support staff.

A sustainable and resilient local government sector that delivers priority services and empowers communities

• In 2021-22, made available £50.4 billion to help councils deliver their core responsibilities, a rise in Core Spending Power of 2.8% in cash terms from £49.0 billion in the previous year.

• Launched a £3 billion council tax rebate scheme on 3 February 2022 in response to rising energy bills, to make payments to almost 20 million households, providing a £150 payment to households living in council tax bands A – D as their main home on 1 April 2022.

• Continued the Supporting Families programme in local authorities reported over 55,000 successful family outcomes from 2021-22, representing 79% of outcomes funded through the programme. Since the programme started in 2015, over 470,000 families have been directly helped and sustained significant outcomes up to January 2022.

Ensure the benefits of the Union are clear, visible and understood by all citizens; and reforming the constitution and sustaining our democracy

• Established landmark agreement with Scottish Government to establish two new Green Freeports in Scotland, with additional targeted funding for infrastructure improvements in Freeport areas to level up communities and increase employment opportunities.

• Strengthened engagement arrangements with devolved administrations and partners across the UK through the arrangements agreed in the joint review of intergovernmental relations.

• Introduced the Elections Bill to Parliament in July 2021 to support the delivery of the government’s manifesto commitments on electoral integrity and our wider democratic system.

Strategic Enablers

• Opened a new Headquarters in Wolverhampton and established new offices in Darlington, Edinburgh and Cardiff as we continued to support our Places for Growth agenda. A Northern Ireland office will be established in 2022-23.

• Taken an agile approach in response to the COVID-19 restrictions, with an increasing number of staff taking advantage of the smarter working facilities put in place to allow a blend of office and remote working. Invested to provide enhanced audio-visual equipment in 8 offices to support this, with more offices to follow.

• Increased our investment in growing professional skills across the department. DLUHC became first for Learning & Development in the annual People Survey, across the 16 largest government departments.