Corporate report

DLUHC annual report and accounts 2022 to 2023: Performance analysis

Updated 14 December 2023

Performance analysis

Overview

This section sets out the department’s performance against its five priority outcomes and its strategic enablers in 2022-23. The significant events and challenges that had an impact on delivery activity and outcomes are also specified where applicable.

Delivering in a changing environment

Over the last year, the department made huge progress on its priority outcomes, all whilst responding to significant external events. This includes playing a central role in finding homes in the UK for Ukrainians fleeing the war, dealing with the impact of inflation on our Housing and Levelling Up programmes and navigating the leadership changes at the top of Government, including three Prime Ministers. The outlook for 2023/24 remains challenging, so we continue to be alert and responsive to risks affecting our priority outcomes, both within the department and our work with delivery partners.

Current economic challenges

During the year, we faced challenges across our work resulting from a tough economic climate, such as the steep rises in interest rates, inflation and disruption within supply chains. In local government, this created pressure on sector pay, increased demand for some services (including homelessness) and raised the cost of delivery in areas such as adult social care. In housing and infrastructure, rising material costs initially had most impact on the risk appetite of SMEs and contractors, with the resulting delays exacerbated by global supply chain disruption and rising mortgage rates and private rents hitting new housing delivery as the year progressed. We worked proactively to mitigate these challenges, and where possible, maximise impact within existing budgets and timescales.

In our key local growth investments, we have made good progress in developing mitigations for individual programmes. On the Levelling Up Fund (LUF) for example, oversight systems were established to increase confidence in delivery after the monitoring and evaluation strategy was published on 31 March 2022. Our locally based teams continued to gain invaluable insight on delivery progress on the ground and £65 million was provided to help build local capacity and capability to support projects. For both the Towns Fund and LUF, we introduced Project Adjustment Request (PAR) processes that gave places more flexibility to quickly deal with immediate impacts and changes required.

In the housing market, the challenging environment impacted the building of new housing, and a housing market downturn is still predicted. This is despite a more positive economic outlook in the Office for Budget Responsibility (OBR) March 2023 forecasts following the Spring Budget than predicted around the time of the November 2022 Autumn Statement. As such, our focus was on delivery of our programmes and monitoring the state of the market closely. We worked closely with Homes England and engaged with developers and Registered Providers to understand and mitigate challenges, as well as continuing efforts to increase supply. For example, we announced funding in the Spring Budget for high quality nutrient mitigation schemes to support sustainable development and housing delivery. We have also taken steps to bolster the delivery of social housing and will bring forward a new discounted borrowing rate through the Public Works Loan Board (PWLB) to support local authorities build new council housing.

For our building safety remediation work, sustained high rates of inflation drove up costs and impacted both pace and quality of delivery. Aluminium prices increased by 37% over 2021-22, with 24% for other cladding products and broad‑based rises of up to 20% during the same period. This led to delays in tendering and funding approval processes as suppliers were unable to hold their prices. Despite this, government commitment to funding is capped at £5.1 billion, with the remaining cost being met by industry.

High inflation also placed pressure on local authority budgets and exacerbated workforce challenges. In recognition of this, the 2023-24 Local Government Finance Settlement offered additional resources to put the sector on a more sustainable financial footing. This included £2 billion in additional grant for social care. We continued to monitor emerging pressures and speak with individual authorities who had concerns over their finances, intervening where necessary. Meanwhile, the Exceptional Financial Support Framework remained available for councils requiring long-term financial support.

The economic conditions led to capital underspends emerging in the year, in particular in relation to the Affordable Homes Programme and demand for the Help to Buy scheme. Capital funding of £2.4bn was returned in the supplementary estimates, with £0.7bn of this reprofiled into future years to reflect revised delivery profiles.

Resettlement

We continued to support councils to deliver the Homes for Ukraine scheme. This included committing to provide £1.1 billion through a tariff for each arrival in their area to support guests and sponsors and therefore mitigate increased pressures on homelessness services. We announced on 14 December 2022 that all sponsors would be able to receive an increased ‘thank you’ payment of £500 a month for guests who have been in the country for over a year. We will also be providing £150 million additional funding in 2023-24 for local authorities across the UK to help support Ukrainian guests move into their own accommodation and reduce the risk of homelessness. Where guests leaving their initial sponsorship arrangement are unable to be rematched with a new sponsor or seek accommodation in the private rented sector, statutory homelessness duties will apply.

The £500 million Local Authority Housing Fund (LAHF) was launched in December 2022 to support local authorities whose residents have welcomed Ukrainians fleeing war, to obtain over 3,000 homes by March 2024. LAHF addresses both immediate humanitarian needs and long-term housing needs. Homes will be used initially by Ukrainian guests on sponsorship schemes and Afghans currently in unsuitable and expensive bridging hotels before becoming part of wider affordable and social housing stock.

In March 2023, we announced a £250 million expansion of LAHF to both house Afghans currently in bridging hotels and to ease homelessness pressures. This was over a short time frame due to the urgency of the humanitarian situation, so we streamlined the funding process and gave local authorities more freedom and flexibility on how they deliver. Options include converting existing office space, renovating buildings and using Modern Methods of Construction. Local authorities can also partner with housing associations to assist with their experience in this area.

Climate change, net zero and energy

As a department, we are a key player in the government’s net zero goals and initiatives. This includes decarbonising new buildings and heating, working with the Department of Energy Security and Net Zero (DESNZ), oversight and reform of the energy performance of buildings systems and improving the Energy Performance of Buildings digital service. It also includes contribution to the third National Adaptation Programme (NAP3) being led by the Department for Environment, Food and Rural Affairs (DEFRA), which outlines government’s response to the risks posed by a changing climate. We own or contribute to mitigating risks in areas such as overheating, building fabric and the viability of coastal communities.

We worked with DESNZ on the ‘Powering Up Britain’ plan to ensure alignment with our priorities and to reflect responses to the Climate Change Committee and the Independent Review of Net Zero. We also collaborated on support schemes such as the Home Upgrade Grant, Social Housing Decarbonisation Fund and Energy Company Obligation Scheme.

Our uplift to the energy efficiency standards for new homes came into force in June 2022. Homes are now expected to deliver around 30% less carbon emissions than those built to previous standards. Our new requirements from June 2022 also mean that new residential buildings must be designed to reduce overheating.

We are reviewing the planning barriers that households face when installing energy efficiency measures; in particular, in conservation areas and listed buildings. We consulted on proposed changes to the National Planning Policy Framework, which would include renewable energy measures and adding a new clause stressing the importance of energy efficiency measures and building adaptation.

We also worked with the DESNZ (and its predecessor) on help with rising heating bills, providing direct support to households through the Energy Bills Support Scheme and for households using alternative fuels or heat sources.

1. Levelling Up the United Kingdom

The Levelling Up group oversees and co-ordinates delivery of Levelling Up across government, using data and evidence to monitor progress against the twelve Levelling Up missions outlined in the White Paper. The group also manages numerous funding schemes and place-based interventions to generate local economic growth, boost pride in place, and improve quality of life in the places that need it the most. Strong progress has been made against our missions and White Paper commitments.

What we achieved in 2022-23

• Began work on the 20 Levelling Up Partnerships announced at the Spring Budget, providing bespoke place-based regeneration across the regions of England. We have also committed to establishing 12 Investment Zones across the UK – offering each area a total funding envelope of £80 million over five years.

• Continued to drive forward and co-ordinate the Levelling Up agenda across government through a new Levelling Up Inter-ministerial Group, chaired by the Secretary of State.

• Agreed trailblazer devolution deals with Greater Manchester and West Midlands Combined Authorities, giving local leaders power and influence over levers to unlock the economic growth potential of communities, alongside single funding settlements at the next Spending Review.

• Signed devolution deals with York and North Yorkshire, East Midlands, Norfolk, Suffolk and an expanded North East area which, once implemented, will mean over half of England’s population will be living in an area with a devolution deal and directly elected mayor..

• Established a Spatial Data Unit to support place-based decision-making and delivery of our Levelling Up objectives through better local data, new data tools, insights and innovative modelling.

• Allocated a further £2.1 billion through LUF Round 2 to 111 successful places across the UK, building on LUF Round 1. Funding includes:

• £7 million to help restore and upgrade Newcastle’s historic Grainger Market;

• £18.6 million to transform one of the largest urban Brownfield sites into a waterfront development in Doncaster; and

• £3.3 million to promote green travel and upgrade the electric vehicle charging network across Northern Ireland.

• Provided c.£240 million funding in 2022-23 as part of LUF Round 1. The first two LUF projects Nine Elms in Wandsworth and Portrush Recreation Grounds in Northern Ireland, were completed during the last year. Also agreed a £65 million local authority support package to support places’ capacity and capability to deliver projects.

• Approved all UKSPF Investment Plans in December 2022, with payments made to all 256 places in England, Scotland and Wales. Recognising the different roles Local Authorities play in Northern Ireland, its core allocation was made at Northern Ireland level.

• Made payments totalling £818 million in 2022-23 through the Towns Fund; £253 million for Future High Streets Fund and £565 million for Town Deals. Total spend across both funds to March 2023 is now £1.3 billion. Funding includes £25 million to support new jobs in Hartlepool, £19.5 million to upgrade Swindon and £24.3 million to drive economic growth in Morley.

• Committed over £30 million from the £150 million Community Ownership Fund to save 98 valued community assets across the UK from closing. This includes £115,000 to upgrade the changing facilities at Falkirk Rugby and Football club, £300,000 to re-open Hartcliffe Farm in Bristol and £185,000 to make major improvements to Clayton Community Centre in Accrington.

• Opened all English Freeports for business. These places will receive up to £25 million of seed funding over the coming years. Two Green Freeports in Scotland and two Freeports in Wales were announced in early 2023. Freeports benefit from incentives relating to customs, tax, planning, regeneration, infrastructure and innovation.

• Supported DESNZ to allocate £1.4 billion of government funding to upgrade the energy efficiency and heating systems of low-income households under Social Housing Decarbonisation Fund Wave 2.1 and Home Upgrade Grant 2 over the next two years.

Programmes included:

• Grants for 16 town regeneration projects

• Community Renewal Fund

• UK Shared Prosperity Fund

• Towns Fund / Future High Streets Fund

• Levelling Up Fund Rounds 1 and 2

• Levelling Up Parks Fund

• Community Ownership Fund

• Levelling Up Capital Projects and Capital Regeneration Projects announced at Budget 2023

Risks faced in delivering the priority outcome

External economic factors

External economic factors, principally inflation, have an impact on our ability to deliver programmes within budget and timescales. We are developing ways to mitigate this risk on our key local growth programmes, including introducing Project Adjustment Request (PAR) processes on the Levelling Up Fund and Towns Fund to offer flexibility to deal with immediate impacts. On the Levelling Up Fund, we also agreed funding of £65 million to help local authorities with the capacity and capability to deliver projects and we continued to offer further, targeted support.

Complex funding landscape across Levelling Up

The current approach to distributing funding across multiple pots with varied application requirements has the potential to be too onerous for some councils to navigate, impacting the delivery of levelling up outcomes. We are taking steps to address this and have committed to publishing a plan to streamline the landscape, reducing inefficiency and bureaucracy, and giving local government the flexibility it needs to deliver for local economies.

2. Regenerate and Level Up communities to improve places and ensure everyone has a high quality, secure and affordable home

The Regeneration Group is central to the government’s ambition to level up the country by empowering locallyled regeneration, and ensuring universal access to high quality, secure and affordable housing. Homeownership is still out of reach for many young people, millions endure poor-quality rented housing, and we need to boost housing supply – especially social housing. This includes support for migrants arriving via humanitarian and resettlement routes.

We are increasing the supply of affordable housing through our Affordable Housing Programmes in response to significant economic and inflationary pressures, and supporting the creation of new homes through our Housing Infrastructure and Brownfield, Infrastructure and Land Funds. We launched two new funds this year – our Levelling Up Homebuilding Fund (LUHBF) and Local Authority Housing Fund (LAHF) to provide even more help and support to local housing schemes.

Our home ownership and home building ambitions are supported by the Digital Planning Programme, which has collaborated with local planning authorities and industry partners across a range of interventions to modernise the planning system.

Through proactive legislative reform in the rental sectors, we made progress across several complex and significant pieces of legislation. The Ground Rent Act is now in force, the Levelling Up and Regeneration Bill is at the Lords Committee stage, and ‘Awaab’s Law’ has been drafted into the Social Housing Regulation Bill. The rent cap on social housing rents that we introduced for 2023-24 will help support people facing a rise in the cost of living.

Our key delivery partner is Homes England, and we made good progress on enhancing the agency’s governance framework and delivery strategy. This includes the new Policy Delivery Partnership linking operational delivery more closely with policy making to enable better outcomes.

What we achieved in 2022-23

Capital programmes

• Helped 14,565 more people buy their own homes through the Help to Buy Scheme with £1.2 billion of loan support (April to September 2022 data) and helped over 350,000 people buy their own homes to date.

• Brought our successful 2016-23 Affordable Housing Programme (AHP) to a close having secured delivery of affordable housing in the face of significant economic and inflationary pressures, and worked with the social housing sector and other partners to secure continued delivery through our 2021-26 Programme.

• Launched new funds, such as the £500 million Local Authority Housing Fund set up in response to housing challenges arising from the conflicts in Afghanistan and Ukraine delivering over 3,000 homes by March 2024, and the Levelling Up Home Building Fund to support the development of over 16,800 homes. Announced a £250 million expansion of the LAHF to both house Afghans currently in bridging hotels and to ease homelessness pressures. The £1.5 billion Brownfield, Infrastructure and Land fund will be launched in 2023-34 to help unlock around 75,600 additional homes.

• Responded effectively to global economic pressures by actively managing our funds to help mitigate delivery challenges; our capital funds in particular having been impacted primarily by materials shortages and price inflation. We have reviewed our funds and made changes to how we deliver to ensure we meet our objectives over the coming year and beyond.

Figure 3 - Our performance: Net additional dwellings per annum

Annual housing supply in England amounted to 232,820 net additional dwellings in 2021- 22, up 10% on 2020-21.

The annual housing supply resulted from 210,070 new build homes, 22,770 gains from change of use between nondomestic and residential, 4,870 from conversions between houses and flats and 780 other gains (caravans, house boats etc.), offset by 5,680 demolitions.

Year	Net additional dwellings
2021-22	232,820
2020-21	211,870
2019-20	242,700
2018-19	241,880
2017-18	222,280
2016-17	217,350

Source: Housing Supply: Net Additional Dwellings; release schedule: annually in November

Figure 4 - Our performance: Gross supply of affordable housing completions.

There were 59,175 affordable homes delivered (completions) in England in 2021-22, an increase of 14% compared to the previous year and similar to 2019-20 (less than 0.5% higher). Since 2013-14, affordable rent has become the most common tenure type for affordable homes delivery, and in 2021-22 65% of new affordable housing completions were for rent (including social, affordable and intermediate rent), the same as the previous two years.

Year	Gross supply of affordable housing completions
2021-22	59,175
2020-21	52,100
2019-20	58,900
2018-19	57,175
2017-18	47,069
2016-17	42,195

Source: Affordable housing supply data release schedule: annually in November/December

Reform programmes

• Published plans for tenancy reform, to improve quality and security in the private rental sector by scrapping ‘no fault’ evictions to protect tenants, revising and extending the Decent Homes Standard, creating an Ombudsman and launching a rental Property Portal.

• Amended the Social Housing Regulation Bill to tackle unsafe housing conditions, empower the Regulator to hold landlords to account and introduce professional qualifications to lift standards across the sector.

• Brought the Leasehold Reform (Ground Rent) Act into force, making home ownership fairer and more transparent for thousands of future leaseholders.

• Three new digital planning services, co-designed by a pioneering group of local councils went live on the websites of Buckinghamshire, Lambeth and Southwark councils.

Policy and stewardship

• Launched the Older People’s Housing Taskforce to support the provision of sufficient, high-quality housing for older people across the country.

• Introduced a 7% cap (with certain exceptions) on social housing rent increases for 2023-24 to protect social housing tenants. Tenants could save up to £200 on average in 2023-24 under a 7% cap, compared to if rents were allowed to increase by CPI+1% (rate as at September 2022).

Homes for Ukraine

• Supported the welcome, resettlement and integration of people seeking safety in the UK through protected routes. This includes:

• the Homes for Ukraine Scheme which has seen over 121,000 individuals arrive in the UK;

• the British National Overseas Welcome Programme which has seen over 154,400 visas granted to those leaving Hong Kong since 1 January 2021; and

• support for those on the Home Office-led Afghan resettlement scheme into settled accommodation.

Risks faced in delivering the priority outcome

Financial risks

The change in economic context, with price inflation, a tight labour market and material shortages has posed and continues to pose a major risk to the successful delivery of our housing funds.

We actively manage our risk profile through our governance structures at both programme and portfolio level. The portfolio includes a mix of interventions, from capital grant funds to legislative-led reforms. We aim to ensure a balanced risk appetite across the interventions in order to best achieve our strategic objectives.

We actively work with Homes England and our wider delivery partners to agree and implement flexible methods of delivery whilst ensuring value for money. Where necessary this includes resetting fund objectives to reflect the changed delivery context.

People risks

We are implementing an ambitious package of interventions in a challenging economic context. Maintaining delivery in this context requires us to ensure we have the right capacity and capabilities within the Regeneration Group and elsewhere. This will remain a challenge given the tight labour market conditions.

To build resilience, we are strengthening oversight of programme progress, taking particular care to ensure we commit to what is realistic and achievable, while at the same challenging ourselves to push the boundaries of what we can achieve.

Resettlement and humanitarian schemes

A strong approach to risk management has been built into the running of the Homes for Ukraine sponsorship scheme, working closely with other government departments and local government to identify and mitigate risks. Mitigations include ensuring appropriate safeguarding protections are in place alongside swift access to safety in the UK, and ensuring integration, access to employment and accommodation options. More broadly across the resettlement and humanitarian schemes, we take a cautious approach to risk management, tolerating a limited degree of risk, whilst recognising that we alone do not hold all the levers to mitigate risks fully, and so work closely with wider partners.

3. Ensure that buildings are safe and system interventions are proportionate

The tragedy at Grenfell Tower made clear the terrible consequences that can arise from poor industry practice, insufficient oversight and a lack of development of the regulatory system. We are undertaking an expansive programme of work to reform the buildings system, remediate problems in the existing buildings stock and deliver on our commitment to the Grenfell Tower Public Inquiry to make lasting and meaningful change.

In 2022-23, we made significant progress in making sure that those responsible pay for the cost of remediation. 46 developers signed remediation contracts, meaning they are now legally responsible for an estimated £2 billion of works. In tandem, we continued to drive progress through our government-led remediation programme: the ACM remediation fund (408 buildings completed remediation works as end March 2023); Building Safety Fund (116 building completed remediation works as end March 2023); and the Cladding Safety Scheme (which opened a pilot phase in November 2022).

We are also establishing a new regulatory regime – enabled through the passing of the Building Safety Act, which established the Building Safety Regulator and National Regulator for Construction Products.

Finally, we continue to support the Grenfell Tower Inquiry in our role as a core participant. Evidence sessions have now concluded and we await the final report.

What we achieved in 2022-23

• The Building Safety Act received Royal Assent in April 2022, bringing into law the seeds of a new regulatory regime and delivering protections for qualifying leaseholders from the costs associated with remediating historical building safety defects. The Act also established three new bodies: the Building Safety Regulator, the National Regulator of Construction Products and the New Homes Ombudsman.

• Progressed the remediation of unsafe Aluminium Composite Material (ACM) cladding. 408 (83%) of all identified highrise residential and public owned buildings in England have completed remediation work as at the end of March 2023.

• The Building Safety Fund re-opened against a new risk methodology – PAS 9980 – in July 2022. As of the end of March 2023, £1.85 billion had been allocated for the remediation of non-ACM cladding in high-rise residential buildings.

• Opened a pilot scheme in November 2022 to remediate or mitigate unsafe external wall systems of buildings between 11-18m in height. The wider rollout of this scheme will commence in 2023/24.

• As of the end of March 2023, 46 developers (of 49 who signed a pledge in 2022) had signed developer remediation contracts, legally committing them to fix relevant defects in buildings they had a hand in developing. The estimated cost of these works is in excess of £2 billion.

• Top lenders opened the mortgage market for cladding affected properties, following new Royal Institute of Chartered Surveyors (RICS) guidance published on 9 January 2023.

• Continued to support the Grenfell Community and the Grenfell Memorial Commission, who published their first report in May 2022 setting out ideas for a future memorial. Alongside this, we continued to keep the Grenfell Tower safe and secure until a decision is made about its future.

• Continued to fulfil our obligations as a Core Participant to the Grenfell Tower Inquiry. Evidence sessions have now concluded and we await the Inquiry’s final report.

• In June 2022, an interim uplift to Part L (conservation of fuel and power) of the Building Regulations came into force, meaning new homes will be expected to deliver 30% fewer carbon emissions compared to previous standards.

• Improved energy efficiency standards in building regulations, supported by a decarbonising electricity grid, are resulting in a downward trend in CO2 emissions from new dwellings.

Figure 5 - CO2 emissions per m2 in new dwellings by year

Year	2010	2011	2012	2013	2014	2015	2016	2017	2018	2019	2020	2021	2022
KG/CO2/per sqm.	21	20	19	17	17	17	17	16	16	16	16	16	15

Risks faced in delivering the priority outcome

The buildings system is complex, requiring the co-ordination of many different actors and where incentive structures are not always aligned and we do not control everything. Our principal risks are set out below.

Potential of a further fatal building safety incident

We are addressing this through overseeing remediation of unsafe cladding defects in existing high-rise buildings through our ACM remediation programme and Building Safety Fund, and have launched a pilot for medium-rise buildings. We work closely with partners to drive pace of remediation, providing enhanced support to applicants and taking action against building owners who are failing to act. We are also working with developers and Registered Providers to monitor progress on self-remediation.

Building safety regulations failing to address critical safety issues

We have established the Building Safety Regulator (BSR) to provide a more stringent regulatory regime for high-rise and high-risk buildings and mitigate structural building failure, heightened risk of fire, and/or harm to the occupants of buildings. Alongside this, the Building Safety Act places requirements on Accountable Persons to improve safety management in high-rise buildings.

External changes threatening the safety and resilience of our building stock

We are undertaking further work to build our evidence base on overheating risk in residential properties and are beginning to establish the longer-term approach and structures that we will need to become effective stewards of the built environment.

4. A stronger Union and ensuring its benefits for citizens in all parts of the UK are clear and visible

We continue to lead the delivery of the government’s priority to ensure the benefits of the Union are clear, visible and in the interest of all citizens. This includes strengthening collaboration between the government and the devolved administrations, or intergovernmental relations , and engaging all levels of government, business and civic society together in the interests for citizens across the UK.

There are many examples of successful collaboration this year. We have continued to work with devolved administrations to run the Homes for Ukraine Scheme to help thousands of Ukrainians fleeing conflict to find accommodation across the UK.

As set out in earlier sections, we have continued to level up communities across the UK, announcing the locations of Freeports in Firth of Forth and Cromarty and Inverness in Scotland and Celtic and Anglesey in Wales, and delivering £2.6 billion of levelling up funding across the UK through the UK Shared Prosperity Fund.

To tackle rising global inflation in March 2023, the government announced measures to help people across the UK deal with rising living costs, worth over £22 billion in total for 2022-23 to support families. This included cutting fuel duty, raising National Insurance thresholds, and doubling the Household Support Fund – £79 million of which was specifically for the devolved administrations.

What we achieved in 2022-23

• Strengthened intergovernmental relations arrangements over the course of the year, with 277 Ministerial meetings held in the 2022 calendar year.

• Hosted the 38th Summit of the British Irish Council in November. This is a key forum for intergovernmental relations established by the Belfast/Good Friday Agreement with Rt Hon Rishi Sunak MP being the first Prime Minister to attend in 15 years.

• Held the inaugural meeting of the Islands Forum in Orkney in September 2022. The forum was established to bring together island communities from across the UK to tackle common challenges and share best practice.

• Delivered an ambitious devolution capability programme for civil servants in collaboration with devolved governments and government departments with 17,302 civil servants attending training in the 2022 calendar year..

• Improved the availability of coherent UK-wide data and evidence, through work across government and with the Office of National Statistics. This reflected our commitments set out in the UK Concordat on Statistics.

• Made further progress on the common frameworks with the Resources and Waste and Emissions Trading Scheme Common Frameworks published on gov.uk.

• With DESNZ, delivered the Energy Bills Support Scheme UK wide, including bespoke support for Northern Ireland, working with the Northern Ireland Civil Service.

• Established two Scottish Green Freeports in Firth of Forth and Cromarty and Inverness in January 2023. In March 2023, the Celtic and Anglesey Freeports were announced in Wales, with work underway on options for a Freeport in Northern Ireland.

• Continued to work with the devolved administrations to deliver four Investment Zones across Scotland, Wales and Northern Ireland, and to extend Levelling Up Partnerships UK wide. £2.6 billion has been allocated for investment in local communities through the UK Shared Prosperity Fund.

5. Enable strong local leadership and increase transparency and accountability for the delivery of high quality local public services, and improve integration in communities

Our stewardship of the local government sector continues to support authorities in delivering quality public services and driving economic growth in their local areas. Over the last year, the sector has managed external risks including inflationary pressures and increased service demands – from social care to resettlement. We have supported councils in meeting such challenges with additional funding through the Autumn Statement and Local Government Finance Settlement.

We have continued to strengthen accountability, progressing work on the Office for Local Government to improve transparency of local government performance, strengthening aspects of the local government audit framework, and responding to a number of governance and financial failures in councils.

On homelessness and rough sleeping, a new Rough Sleeping Strategy and targeted programmes are supporting authorities responding to pressures from the cost of living, asylum and resettlement, and housing availability.

Elsewhere, good progress has been made across a number of programmes, from introducing the requirement for Voter ID at the local elections, to Supporting Families and Changing Futures programmes which support those facing multiple disadvantages. Our vital work on resilience has continued through a number of emergencies and significant events, including flooding, the pandemic and the death of Her Late Majesty.

Finally, we have continued an ambitious legislative agenda with important Bills on the Holocaust Memorial and Business Rates Revaluation now in the House.

What we achieved in 2022-23

• Delivered a Local Government Finance Settlement for 2023-24. This makes up to £59.7 billion available 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 and an additional £2 billion for social care. This is in recognition of the vital role of local government in local economies and communities.

• Published a policy statement which provided certainty to the end of this Spending Review period enabling local authorities to plan ahead with confidence.

Figure 7 - Our Performance: Final Local Government Finance Settlement 2023-24

£5.1 billion

Increase in Core Spending Power in England secured through the 2023-24 Local Government Finance Settlement.

• Established the Office for Local Government to promote accountability and give authoritative data on local government performance and appointed the Interim Chair. We also supported Public Sector Audit Appointments Ltd (PSAA) in their successful procurement of audit contracts for 2023-24 to 2027-28.

• Helped 63,000 vulnerable and disadvantaged families with multiple and complex issues such as housing insecurity and substance misuse, through our Supporting Families programme.

• Unveiled the National Windrush Monument at London Waterloo Station, providing permanent place of reflection, fostering greater understanding and celebrating the talent, hard work and contribution of the Windrush generation.

• Delivered a Faith New Deal pilot fund to 15 projects to develop innovative interventions in tackling social issues affecting those in most need of support across England, working in partnership with councils, schools, police, health providers and voluntary groups.

Figure 8 - Our Performance: Supporting Families

Local Authorities have been funded to achieve successful family outcomes with 574,777 families

Families where successful family outcomes were achieved 534,959 between 2015 and January 2023.

Source – Supporting Families annual report 2023

• Introduced the Holocaust Memorial Bill on 23 February 2023. This aims to remove the statutory obstacle to planning consent that previously prevented the building of a new memorial and learning centre in Victoria Tower Gardens in Westminster.

• Published our strategy to ‘End Rough Sleeping For Good’ in September 2022, setting out a clear vision for rough sleeping. We also announced three-year allocations for the Rough Sleeping Initiative, implemented a new formula for the Homelessness Prevention Grant and launched a new Single Homelessness Accommodation Programme.

• As of April 2023, our Rough Sleeping Accommodation Programme delivered 4,920 homes for rough sleepers across England, up from just over 3,200 in June 2022. We remain confident that the overall target of 6,000 homes will be achieved as we continue to deliver government’s mission to end rough sleeping for good.

Figure 9 - Our Performance: Supporting Families

The number of people estimated to be sleeping rough on a single night in Autumn 2022 was 3,069. This represents an increase of 626 people or 26% from 2021, but down 35% from 2017.

Year	Number of rough sleepers	% change from previous year
2022	3,069	+26
2021	2,440	-9
2020	2,688	-37
2019	4,266	-9
2018	4,677	-2
2017	4,751	15

Source: Rough Sleeping Statistics, Autumn 2022, England. Released annually in February

• Delivered our responsibilities as part of Operation London Bridge, ensuring the safe and successful commemoration of Her Late Majesty through local events that complemented the national programme.

• 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 in January 2023, ready for the first elections requiring Photo ID in May 2023.

Risks faced in delivering the priority outcome

We continue to monitor and respond to pressures on local government including inflation and capability, particularly on areas such as social care or resettlement. Relationship management and system oversight play important parts in our efforts to mitigate these risks but our Local Government Finance Settlement making up to £59.7 billion available for 2023-24 – a 9.4% increase in cash terms on 2022-23 – has helped the sector become more sustainable.

Local council financial risks

Three Section 114 notices were issued in the financial year 2022-23 (Thurrock, Croydon and Northumberland). In September 2022, the former Secretary of State, Rt Hon Simon Clarke MP, announced that he was using his powers to intervene at Thurrock, due to concerns about the scale of the financial and commercial risk facing the council. In March 2023, the now Secretary of State, Rt Hon Michael Gove MP, announced that he was minded to put the non-statutory intervention in Croydon on to a statutory footing given evidence that the council is failing to comply with its Best Value Duty. In February 2023, government agreed to provide Slough, Croydon, Thurrock, Cumberland and Westmorland and Furness councils with in-principle exceptional financial support for 2023-24 and, in the cases of Croydon and Thurrock, to cover prior years.

External risks

The possibility of a national power outage, energy supply disruption, the emergence of a COVID-19 variant of concern, severe weather or public disorder is also closely monitored in case a cross-departmental response is required and may impact the delivery of our priorities.

6. Strategic enablers

We have continued to strengthen our corporate centre, and building our capability and expertise, in line with Government Functional Standards.

Workforce, skills and location

Our Places for Growth programme continues to be a highlight, with 35% of colleagues based in offices outside London as of March 2023. This compares to 23% in March 2020, our baseline position for this programme. A key area of focus within this work remains increasing the percentage of Senior Civil Servants (SCS) based outside London. We had 17% of SCS based outside of London at the end of March 2023 and are aiming to reach 37.5% by March 2025. We continue to operate from offices across the UK, including from a new office in Belfast that was established in 2022/23.

Our Staff Engagement score has decreased, partly reflecting an uncertain period with several changes to our ministerial team as well as the government-wide Civil Service 2025 programme that aimed to significantly reduce headcount across the Civil Service but which has since been cancelled. Whilst survey completion rates remained high at 87%, our engagement score decreased by 6% to 60%, lower than the Civil Service benchmark of 65%. As one part of our response, a programme of roadshows began to engage with colleagues across all our locations on our priorities and how all our people contribute to achieving them.

Innovation, technology and data

We continue to focus on Digital, Data and Technology (DDaT) to ensure we get the best for our citizens, as well as ensuring we have an efficiently run department. Cyber Security continues to present a significant risk, but the Government Security Group (GSG) assessment in 22/23 concluded that we met all of the required standards. We continue to strengthen our controls, welcoming the introduction of the new GovAssure framework in 2023-24 to provide ongoing assurance and identify further recommendations. Our DDaT function was also rated as the highest scoring in the annual functions survey run by the Cabinet Office across all major departments. We also continue to score highly on how our functions work together.

We developed a new for unaccompanied children and minors and the reconciliation of council funding for the scheme.

We launched the Open Digital Planning project website and three new live digital planning services, which were co-developed with local authorities. We also funded 19 local planning authorities to improve the technology they use to receive and process planning applications. The DLUHC digital planning programme were gold winners for ‘Best use of digital and technology’ at the iESE Public Sector Digital Transformation Awards in March 2023, and with local planning authority partners won ‘Digital Change Project of the Year’ at the Government Project Delivery Profession Awards for collaborative work on planning software. Our Local Digital Cyber Support programme has continued to work in collaboration with local authorities to instil cyber best practice and principles. We continued activities to facilitate local government digital transformation with new software and services, which are cyber secure, efficient, and better meet the needs of citizens. Through the Local Digital Fund, we provided £3.4 million to fund 17 new projects and four existing projects. This is alongside £6 million for the Future Councils pilot of 8 councils undertaking a series of place-based reforms.

We have strengthened our data capability in the year and introduced improved governance. We recruited our first Chief Data Officer, established a Spatial Data Unit to better inform place-based decision making, and introduced a new Data Board as part of our governance structures. This will oversee the refresh of our data strategy which we aim to implement in the next financial year.

Delivery, evaluation and collaboration

We have implemented the first phase of our Delivery Improvement Plan, which we developed with the Infrastructure and Project Authority (IPA) following an assessment against the Government Functional Standard for Project Delivery (GovS 002). This included launching a new Project Delivery Hub that includes tools and guidance and outlines the governance, assurance and project delivery frameworks within the department. We also strengthened our internal assurance over major programmes and continued to invest in our project delivery capability. This is through supporting leaders onto various IPA led training programmes, as well as the introduction of the Government Online Skills Tool (GOST) to colleagues across the department.

Our Commercial teams enabled the delivery of £8.4 million full year equivalent savings (cashable savings £5.7 million, cost avoidance £2.7 million) on a contract portfolio that has grown at a compound annual growth rate of 42% for the past 3 years. Improving the department’s Contract Management capability has been a key focus and we can report that accreditation progress is on target (100% of Gold and Silver Contract Managers accredited or active in gaining accreditation). Broader progress is evidenced by improved audit outcomes.

This was the first full year of expanding the commercial functional support to the department’s grant funding programmes. We ended the year with an established stewardship programme for the oversight of the department’s portfolio of 54 Private Finance Initiative (PFI) projects and an in -house commercial capability, contributing to the assessment and management of the department’s grant funding programmes. Our Local Government Commercial Capability Programme interventions reached 60 councils that together represent 33% of the total sector spend. Of note is that 487 local government contract managers achieved foundation level accreditation.

The Government Internal Audit Agency (GIAA) assessed the department as having made good progress on improving our risk maturity in 2022-23 through the implementation of our Risk Action Plan and risk business partners. We will continue to embed improvements in this area, including through a refreshed Risk Management Framework.

Counter fraud has been enhanced with the publication of a new framework and standards to support the delivery of departmental objectives and align to requirements set out by the Public Services Fraud Authority (PSFA). In relation to grants management, the department has developed a Grants Fraud Strategy and adopted the three lines of defence model. The GIAA awarded the department a grading of ‘Substantial’ in relation to both Counter Fraud and Grants Management. Improvements to the department’s Contract Management performance have also been recognised by the GIAA.

We have discharged DLUHC’s reporting responsibilities and secured the resources needed to deliver through our Annual Report and Accounts as well as our Estimate submissions agreed by Parliament. Our finance teams were at the heart of our Budget 2023 work with HMT, resulting in substantial new investments in Levelling Up and Social Housing in particular. The past year has seen a challenging economic outlook and fluctuations in market confidence. The construction industry has been significantly impacted with a commensurate effect on our large housing programmes. As a result, we have had further underspends against our Capital budgets. We have taken the opportunity to revise our approach to project management and forecasting across all of our complex programmes along with agreeing flexibilities that allow us to protect delivery whilst ensuring value for money. These measures have been enshrined in the aforementioned Delivery Improvement Plan and through updated business cases and are already helping to improve our performance.

As part of streamlining services across the Departmental Group, we have onboarded the Regulator of Social Housing into our current shared transactional finance service, which supports the Department, the Planning Inspectorate and the Valuation Tribunal Service. Longer term, we have been working with His Majesty’s Revenue and Customs and the Department for Transport on the development of a new shared transactional finance and HR service as part of the Unity Cluster, which will improve our operational resilience and drive reduced service costs across government. We have secured an initial £25 million of investment funding from HMT towards our plans. The service is expected to launch in 2024, with DLUHC being onboarded during 2026-27.

We published our Evaluation Strategy during the year and we continue to ensure that we understand the impact of our policies and programmes. This sets out the evaluation plans across our work. We also published our Areas of Research Interest document to help further build relationships with research providers and other interested parties.

Contribution to Sustainable Development Goals

We contribute to the following Sustainable Development Goals (SDG) through the delivery of our priority outcomes:

• SDG1 – End poverty in all its forms everywhere.

• SDG3 – Ensure healthy lives and promote well-being for all at all ages.

• SDG8 – Promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all.

• SDG9 – Build resilient infrastructure, promote inclusive & sustainable industrialisation and foster innovation.

• SDG10 – Reduce inequality within and among countries.

• SDG11 – Make cities and human settlements inclusive, safe, resilient and sustainable.

• SDG13 – Take urgent action to combat climate change and its impacts.

• SDG16 – Promote peaceful and inclusive societies for sustainable development, provide access to justice for all and build effective, accountable and inclusive institutions at all levels.

The main contributions are outlined below.

Levelling Up

• The £4.8 billion Levelling Up Fund is being delivered across multiple funding rounds, with at least £800 million set aside for Scotland, Wales and Northern Ireland. This confirms the scope of contribution towards SDG8, SDG10 and SDG11.

• The £2.6 billion UKSPF supports SDG8, SDG10 and SDG11 by promoting inclusive and sustainable economic growth, full and productive employment and decent work for all.

• Our £3.6 billion Towns Fund is contributing to SDG10 and SDG11. Town Deals valuing £2.35 billion have been allocated across all 101 places, committing investment across c.700 projects nationwide. This is alongside the Future High Streets Funding in which £830 million has been allocated across 72 high streets, town centres and local communities in England.

• The Borderlands Inclusive Growth Deal was signed in 2021, committing investment of up to £265 million in the cross‑border area of Scotland and England, contributing to SDG11.

• As hubs for investment, transport and innovation, Freeports will help make towns and cities inclusive, resilient and sustainable and will, in turn, reduce income inequality, contributing to SDG11 and SDG10.

Regeneration

• Our £1.5 billion Levelling Up Home Building Fund supports delivery of 42,400 homes, mainly outside London and the South East, and supports innovation such as modern methods of construction, contributing to SDG9.

• The Enable Build scheme has to date guaranteed £346 million and 2,971 homes have been supported. Affordable Homes Guarantee Scheme 2020 has to date guaranteed £648.5 million which is supporting the delivery of 5,062 new homes, contributing to SDG9.

• The Levelling Up and Regeneration Bill will make the planning process easier to navigate, faster and more predictable, reducing delays and costs for housebuilders, also contributing to SDG9.

• We support the SDG11 through our £11.5 billion Affordable Homes Programme, which delivers homes across all sectors, and our Help to Buy scheme which supports the development and sale of new homes.

• Social Housing reforms will contribute to the wider Levelling Up White Paper ambition for non-decent homes to be reduced by 50% by 2030, with further reforms delivering a fairer, more secure and higher quality homes in the private rented sector (PRS). Decency in rental housing will help make our cities more attractive and sustainable, contributing to SDG11.

• To protect wildlife sites and promote sustainable development, with DEFRA we are providing up to £30 million for Natural England to deliver a Nutrient Mitigation Scheme to reduce nutrient pollution at source; SDG11.

• Homes sold through the Help to Buy scheme must meet building quality standards and must comply with the energy efficiency requirements of the Building Regulations, contributing to SDG13. Building Safety Charter may apply to large developments under the scheme.

• We will consult on improving energy efficiency within six months of the Social Housing (Regulation) Bill Receiving Royal Assent, contributing to SDG13.

Local government

• A sustainable and resilient local government sector that delivers priority services and empowers communities priority outcome supports SDG1, SDG3, SDG8, SDG10, SDG11 and SDG16.

• In support of all these goals, the Local Government Finance Settlement made £59.7 billion available for 2023-24, a 9.4% increase in cash terms on 2022-23, enabling local governments to deliver quality public services, whilst playing a key role in their local economies and communities.

• We made available a £50 million top-up to the Homelessness Prevention Grant to local authorities in 2022-23. This additional funding supports local authorities to help prevent vulnerable households from becoming homeless and to manage local homelessness pressures, contributing to SDG1, SDG3, SDG10, SDG11 and SDG16.

• Over the past year, we have seen great change across the Supporting Families programme. This year, we now have a joint team with the Department for Education. This partnership has seen our funding expand, and our ambition with it. Over this Spending Review period we have received an increase of £200 million, bringing our overall funding for the programme to £695 million, contributing to SDG1 and SDG10.

Safer and greener buildings

• Ensure that buildings are safe and that system interventions are proportionate contributes to SDG9, SDG11 and SDG13.

• The Building Safety Remediation programme’s immediate focus, as noted above, is ensuring residents are safe and feel safe in their homes, in line with SDG11.

• The uplift to the Building Regulations, will provide a meaningful reduction of approximately 30% in carbon emissions from new homes. It will also act as a stepping stone to the Future Homes Standard, to be introduced from 2025, which will result in at least 75% fewer carbon emissions from new homes, contributing to SDG13

• We are committed to delivering the Energy Performance Certificates (EPC) Action Plan to increase the accuracy, reliability, and trust in EPCs and make them more valuable and effective in driving energy and carbon saving, also contributing to SDG13.

• Our Part O guidance on overheating in buildings will also help to provide housing and infrastructure that is resilient to a changing climate and helps protect people from the impacts of extreme heat. This is one of the department’s contributions to the third National Adaptation Programme, which will show how we intend to address some of the risks of a changing climate, again contributing to SDG13.

Our expenditure and financial position

Group budget

This section and the diagram below represent the 2022-23 Departmental Group budget. Actual expenditure compared to budget can be found on page 88. The Department’s budget at the 2022-23 Supplementary Estimate was £5.6 billion lower than in 2021-22. This was mainly due to a reduction in the budget for COVID-19 measures and the Council Tax Rebate scheme, which was partly offset by new funding for the creation of the Homes for Ukraine programme and an increase in business rates related budgets.

Our total net expenditure budget of £37.1 billion^{[footnote 1]} is shown in the centre of the diagram. This is then split between two segments; local leadership (£26.2 billion) and other priority outcomes as shown on page (8 £10.9 billion). The outer circle shows the main components of spend within each segment. This chart is mapped against the priority outcomes on page 9 and is a different classification from that shown in the Statement of Outturn against Parliamentary Supply on page 88, which shows core and local government budgets as separate control totals rather than classifying by priority outcome.

• Priority Outcome 4, Strengthen the Union, is too small to label on the chart. The total is £40 million.

Local Leadership (£26.2 billion) The largest part of our budget relates to Priority Outcome 5 – Enable strong local leadership and increase transparency and accountability for the delivery of high quality local public services, and improve integration in communities. 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. Local government funding is provided to local authorities and the majority can be spent on any service^{[footnote 2]}. The outer circle splits our Local Leadership budget into further detail:

• Business Rates and NNDR £15.6 billion

• Social Care Grants £2.3 billion

• Better Care Fund £2 billion

• Revenue Support Grant £1.7 billion

• Homes for Ukraine £1.3 billion

• Other Local Government Grants £2.2 billion

• Homelessness and Rough Sleeping £675 million

• Other £418 million includes council tax grants (£170m), Independent Living Fund (£160 million), the core department’s communities spending (£67.6 million) and the core department’s resilience spending (£19.1 million).

Levelling Up, Housing and Other (£10.9 billion) The Levelling Up, Housing and Other budget is used to fund the department’s programmes and, in the diagram, has been split by priority outcomes.

• Priority Outcome 1 – Levelling Up the United Kingdom (£2.2 billion): 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.

• Priority Outcome 2 – Regenerate and Level Up Communities to improve places and ensure everyone has a high quality, secure and affordable home (£7.8 billion): 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.

• Priority Outcome 3 – Ensure that buildings are safe and system interventions are proportionate (£695 million): 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.

• Priority Outcome 4 – Strengthen the Union to ensure that its benefits, and the impact of levelling up across all parts of the UK, are clear and visible to all citizens (£40 million): We are driving the delivery of government’s priorities to strengthen the Union and improve the quality of intergovernmental engagement.

• Administration (£340 million) 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 highperforming people, who are supported and trusted by empowering and inclusive leaders.

Annually managed expenditure (AME) budgets are shown separately in the Statement of Outturn against Parliamentary Supply on page 88 but the diagram above includes AME budgets attributed to the strategic area that they relate to.

Group loans, investments and returns

In order to achieve its objectives more efficiently, the department has increasingly made investments or given loans instead of grants, sometimes from its own balance sheet and sometimes by guaranteeing loans made from other entities. All loans are due to be repaid in full with an appropriate rate of interest. However, as with any investment product, there is a risk of loss and expected credit loss provisions are recorded as required. The department aims to lend in situations where commercial lending would be unavailable and as a result by their very nature our loans may be higher than average risk.

Help to Buy closed to new applications on 31 October 2022. Homebuyers were required to legally complete the purchase of their home by 31 May 2023 to be eligible for an equity loan. Whilst there were additions early in 2023-24 for equity loans that are already approved, we do not expect the size of Help to Buy to continue to grow at the same pace that it has in recent years. Once redemptions exceed additions, it’s likely that the total value will reduce, although revaluation of the portfolio can go up or down.

Equity loans under the Help to Buy scheme are provided for a period of 25 years, finance extended under the guarantee programmes have maturities of up to 30 years, and the majority of the department’s direct loans mature in less than 10 years.

Group financial position

The department’s Statement of Financial Position as at 31 March 2023 page 121 shows the size of our asset base which is predominantly made up of the department’s investment in the Help to Buy scheme. The Governance Statement describes how the department manages the financial and credit risk of its portfolio of financial instruments.

Sustainability report

DLUHC’s Property Team provides an intelligent client function which sets the department’s estates strategy and plans for operational delivery. The Government Property Agency (GPA) is the department’s delivery partner and responsible for managing the estate on a day-to-day basis. Under the direction of our Property Team, the GPA is responsible for delivery for actions which drive forward and support the department’s work towards meeting the Government Greening Commitments (GGC).

This report covers the department and its Arms-Length Bodies (ALBs) Homes England and the Planning Inspectorate. The data includes the performance for the financial year 2022-23 against the 2017-18 baseline (unless otherwise stated^{[footnote 3]}). When ‘the department’ is referred to in this report, it includes the data we have available from our ALBs, provided to us by the GPA. The data does not include the information from all our ALBs but we recognise the importance of collecting data going forwards.

The department is a minor tenant in all the buildings it occupies and generally shares with other government departments or departmental bodies. Performance against sustainability targets is therefore a shared endeavour.

The department subscribes to several targets including the mandatory GGC for reducing energy, water, paper, reducing travel and managing waste. These targets were updated during 2022-23 with a new target period to 2025.

Our overall GGC performance

In 2022-23, we met the GGC targets for Greenhouse Gas (GHG) reduction, water consumption, the overall waste reduction target, and the waste to landfill target. We have not yet met the recycling target although we made significant progress against the 2021-22 baseline.

Requirement	2017-18 baseline	2018-19 reduction	2019-20 reduction	2020-21 reduction	2021-22 reduction	2022-23 reduction
Reduce overall GHG emissions by 47%	10,057 tonnes of CO2	32%	34%	56%	68%	71%
Reduce direct GHG emissions by 25%	1,964 tonnes of CO2	12%	8%	23%	54%	56%

Summary of overall Greenhouse Gas Emissions performance

The department has decreased its total in-scope gross Greenhouse Gas (GHG) emissions by 71% since the 2017-18 baseline year, against the target of 47%. Direct GHG emissions have reduced by 56% over the same period, exceeding our target to reduce direct GHG emissions by 25%.

Sustainability reporting

HM Treasury (HMT) has published the 2022/23 Sustainability Reporting Guidance which gives additional minimum reporting requirements for central reporting again Greening Governing Commitments (GGCs). HMT asks for reporting against three ‘scopes’.

Scope 1 – Direct Greenhouse Gas Emissions

Scope 1 focuses on fuels for combustion, fugitive emissions and emissions from vehicles owned or leased, physical/ chemical processing, and fugitive gas (gas emissions from refrigerators and air conditioning equipment). Our performance was as follows:

Combustion fuels

	2021-22	2022-23
Kilowatt hour (kWh) of the total estate (1000 watts)	4,760,310	5,536,687
Tonnes of CO2	872	1,011

Overall Greenhouse Gas consumption has reduced since 2017-18 baseline of 10,057 tonnes of CO2, illustrated in the table ‘Summary of Overall Greenhouse Gas Emissions performance’.

We saw an increase in consumption of natural gas in 2022-23 compared against 2021-22. Consumption in 2021-22 was lower due to reduced usage of our offices during COVID-19. Office attendance increased in 2022-23, resulting in the higher consumption figures. In addition, the department occupied additional offices following a Machinery of Government change, and the Winter of 2022 was also particularly cold, which meant increased use of energy was used to maintain a safe and comfortable office temperature.

The department has no infrastructure to self-generate energy. Therefore, the departments emissions from renewable energy is zero for 2022-23, as it was for previous years. The department has never manufactured or processed chemicals or disposed of chemicals and has not produced any fugitive emissions.

Emissions from vehicles owned or leased by the department

The core department does not own or lease any vehicles for business travel. Instead, it uses a hire car system, where employees can book a hire car through our travel booking provider. The data here relates only to Homes England which maintains a fleet of cars.

Petrol cars

	2021-22	2022-23
Km travelled	171,886	258,593
Tonnes of CO2 emitted	31.28	46.57

Diesel cars

	2021-22	2022-23
Km travelled	41,097	27,370
Tonnes of CO2 emitted	6.85	4.54

In 2022-23, Homes England used more petrol and fewer diesel cars for business travel compared to 2021-22. The overall increase was due to an upturn in the numbers of site visits where the only realistic means of travel is by car. The previous year had less visits due to COVID-19 disruption.

Ultra-Low Emissions Vehicles (ULEVs)

	2021-22	2022-23
Km travelled	0	7,729
Tonnes of CO2 emitted	0	0.53

Homes England decided to incorporate ULEV’s into their fleet in 2022-23. This was informed by the GGC target for departments car and van fleets to be fully zero emissions by 2027. Homes England’s fleet comprised of 66.5% ULEV’s in 2022-23.

Scope 2 - Energy indirect GHG emissions

Scope 2 focuses on purchased electricity, heat, steam, and cooling.

	2021-22	2022-23
Mains standard grid electricity consumption (kWh)	339,956	535,345

	2021-22	2022-23
Mains Green Tariff Electricity purchased (kWh)	7,511,929	5,017,252

The same factors which underpin the increase in Greenhouse Gas emissions also explain the increase in Scope 2 indirect GHG emissions. We are currently investigating the decrease in the usage of Mains Green Tariff Electricity.

Scope 3 – Official business travel, the use of and water, and waste management

Scope 3 data regarding the use of public transport reflects the core department and Homes England business travel.

Rail travel

	2021-22	2022-23
Rail travel in kilometres (km)	4,116,722	7,794,513
Tonnes of CO2 emitted	146.03	276.63

Taxi travel

	2021-22	2022-23
Taxi travel in kilometres (km)	10,196	12,312
Tonnes of CO2 emitted	1.52	1.83

Bus travel

	2021-22	2022-23
Bus travel in kilometres (km)	148	843
Tonnes of CO2 emitted	0.02	0.09

London underground travel

	2021-22	2022-23
London underground travel in kilometres (km)	1,916	1,971
Tonnes of CO2 emitted	0.05	0.05

Domestic air travel

	2017-18 Baseline	2018-19	2019-20	2020-21	2021-22	2022-23
CO2 Emissions from Domestic flights	29	42	49	0	7	14

The GGC target aims for departments to reduce emissions from domestic flights by at least 30% from the 2017-18 baseline. We have met the target of 20.3 tonnes of CO2 per financial year and have reduced our emissions significantly since the 2017-18 baseline.

International air travel

	2021-22	2022-23
International air travel in kilometres (km)	42,091	48,313
Tonnes of CO2 emitted	3.42	3.82

Eurostar travel

	2021-22	2022-23
Eurostar travel in kilometres (km)	0	1,352
Tonnes of CO2 emitted	0	0.01

Business travel via rail, bus and London underground increased in 2022-23 when compared to 2021-22. The increase reflects a return to more usual patterns of business after recovery from COVID-19 disruption.

Water usage

	2017-18 Baseline	2018-19	2019-20	2020-21	2021-22	2022-23
Total water consumption (m³)	58,965	68,800	71,255	47,773	41,862	43,637

The department has reduced its water usage since 2017-18 well beyond the GGC target of 8% reduction. The department’s water usage in 2022-23 represents a 26% reduction compared to our usage in 2017-28. Usage in 2022-23 was greater than in 2021-22 due to greater numbers of staff working from offices.

Waste minimisation and management

The figures exclude waste generated by disposal of ICT equipment which is now reported to DEFRA separately. All data below is in tonnes.

GGC target	2017-18 Baseline	2018-19 % reduction	2019-20 % reduction	2020-21 % reduction	2021-22 % reduction	2022-23 % reduction
Reduce the overall amount of waste generated by 15%	631 tonnes	(35%) Increase	(39%) Increase	63%	60%	15%
Reduce the amount of waste going to landfill to less than 5% of overall waste	2%	5%	3%	5%	9%	4%
Increase the proportion of waste which is recycled to at least 70% of overall waste	54%	76%	68%	71%	53%	77%

Paper purchased

	2017-18 Baseline	2018-19	2019-20	2020-21	2021-22	2022-23
A4 reams of paper equivalent	8,883	11,603	16,881	2,866	13,075	10,651

The GGC target is for government departments to reduce the amount of paper purchased by at least 50% from the 2017- 18 baseline. We are likely to miss this target. However, we have decreased the amount of paper purchased in 2022-23 when compared to 2021-22, due to a range of initiatives introduced.

Consumer Single Use Plastics (CSUP)

	2017-18 Baseline	2018-19	2019-20	2020-21	2021-22	2022-23
Consumer Single-Use Plastics	No baseline recorded	No data	No data	No data	72,028	14,207

We have significantly reduced the amount of CSUPs since 2021-22. This is due to a more stringent procurement strategy regarding CSPUs, which is based on sustainable procurement policy.

Sustainable procurement

Currently, the procurement team are creating a sustainable procurement policy that will seek to ensure that specifications and requirements are as sustainable as possible. The department adheres to the sustainable procurement guidance for goods and services and meets the minimum Government Buying Standards (GBS).

By incorporating sustainability into procurement, our objectives outlined in relevant policies and strategies can be supported, and the contract can be aligned accordingly.

The UK has implemented measures to increase sustainability and social value in the procurement of goods and services, such as the Public Services (Social Value) Act 2012, the UK Climate Change Act, Equality Act, and Modern Slavery Act. The department will, where relevant, utilise procurement to meet local and national priorities.

Reducing environmental impacts of ICT and digital

Environmental impact is considered in all ICT procurements. For example, the recently let ICT hardware contract was awarded to a supplier who as committed to a carbon reduction plan, complying with the Procurement Policy Note 06/21: ‘Taking account of Carbon Reduction Plans in the procurement of major government contracts’.

Additionally, through the procurement process the supplier made demonstrable commitments against social value theme 3, Fighting Climate Changes.

Adapting to climate change

During 2022-23 the GPA has completed a preliminary Climate Change Adaptation Risk Assessment. The work has followed the Office for Government Property Framework. This is work in progress and will be continued during 2023-24 to consider what action plans may be needed as part of a wider Climate Change Adaptation Strategy.

Nature recovery

The GPA are currently developing a Nature and Biodiversity annex to their Design Guide. This annex will include a range of initiatives to enhance biodiversity and nature recovery, particularly in new constructions and when refurbishing outdoor areas. The department will liaise with the GPA regarding projects within existing buildings that it occupies.

Focus for the coming year

The department has three areas of focus for improvement in the coming year. Firstly, it will develop a sustainability function within the department and put in place arrangements for collection, analysis, and reporting on sustainability data to underpin further future improvement. Secondly, we will draw up formal agreements with all our ALB’s to set out how we work together in relation to sustainability. Thirdly, we will target a 10% reduction in our scope 1 emissions by reducing our office footprint.

Other sustainability commitments

Procurement of food and catering

All food provided in our catering outlets is produced to UK or equivalent food standards and is local and in season, where possible. The department buys food from farming systems that minimise harm to the environment, such as produce certified by LEAF, the Soil Association or Marine Stewardship Council. The department also offers fairly traded and ethically sourced products.

Sustainable construction

Government Property Agency (GPA), who manage DLUHC’s estate have published a Net Zero and Sustainability Annex to their design guide. This sets out the ambitions for both new buildings as well as major refurbishments they undertake on behalf of DLUHC. The guide includes consideration of carbon emissions from construction and operation as well as Building Research Establishment Environmental Assessment Method targets.

Small and Medium Sized Enterprises (SMEs)

The total procurement spend made to SMEs will be published by Cabinet Office in a separate publication. This figure includes both direct and indirect SME spend and the department looks to procure through methods that will support the involvement of SMEs and VCSE organisations where possible.

Biodiversity and natural environment

The department’s estate comprises mainly of buildings with little outside space and limited opportunity to enhance the natural environment. GPA is, however, actively exploring opportunities to undertake biodiversity actions within the office spaces occupied.

Sustainable development

Sustainable development remains integral to policy work in the department, notably in planning policy and economic growth activities. The National Planning Policy Framework (NPPF) sets out the government’s view of what sustainable development means for the planning system.

Other required reporting

The department is required to report against various other topics in its Annual Report and Accounts as per the requirements set out in PES (2023) 01:

• Section 70 of the Charities Act 2006 sets out a power for Ministers to give financial assistance to charitable, benevolent or philanthropic institutions and requires that payments made under this power are reported. The table at Annex C sets out the financial assistance provided by the Secretary of State under this power for the year 2022-23, totalling £17.1 million (2021-22, £11.3 million).

• One complaint against the department was accepted for investigation by the Parliamentary Ombudsman during the period 1 April 2022 to 31 March 2023.

• In 2022-23 the department processed 14,182 (2021-22 13,532) items of correspondence from members of the public that were answered by officials. Of these, 51% (2021-22 57%) of letters requiring a response were replied to within our target of twenty working days.

Sarah Healey CB CVO

Accounting Officer

Department for Levelling Up, Housing and Communities

14 July 2023

1. Supplementary Estimates 2022-23. ↩

2. Local share, Revenue Support Grant, business rates relief, top-ups and in year and outturn payments can be spent on any service. ↩

3. Environmental data is for a 12-month reporting period from January 2022 to December 2022. In accordance with annual reporting conventions across other UK Government departments, the Department’s non-financial indicators are compiled using data from the final quarter of the previous reporting year plus the first three quarters of the current reporting year. 2021/22 non-financial indicators have been restated to include actual environmental performance for the 2021/22 financial year. ↩