Rayner’s officials step in after agency at heart of Labour’s housing plan apologises for ‘failings’ in digital scheme that could have paid for as many as 3,360 new homes
Angela Rayner’s ministry has had to step in over “wasteful spending” at Homes England after the government housing agency burned through more than £117m on a failed IT project, The i Paper can reveal.
Labour is relying on the organisation to deliver large parts of its ambitious plan to build 1.5m new homes by 2029, but developers are concerned about the way it has performed.
The taxpayer money Homes England spent on Evolve – an aborted scheme to modernise its error-prone computer systems – could have been enough to pay for as many as 3,360 brand new affordable homes.
It began in 2019, when Conservatives were in power, and was supposed to continue for a decade. But it was brought to halt in May, it has now emerged, after years of warnings about its shortcomings.
‘Troubling’ findings from consultants’ review
The project is a “source of deep regret” that “fell significantly short” of its goals, the agency has said in a Freedom of Information response to The i Paper. The admission came as Homes England finally agreed to release a damning external consultants’ report revealing “troubling” findings about the way the agency had run Evolve.
KPMG found that the project’s leaders were “at odds” with other leaders in the agency. “There was little to no confidence in the business case or the plan to achieve all, or some of it,” the consultants report said.
Developers are now calling for the Government to become more closely involved with Homes England which is responsible for delivering a £27bn programme to build more than 200,000 affordable homes, advising on Labour’s new towns, and securing land for other developments.
Homes England said it had “proven it can deliver high-impact, multi-billion-pound housing and regeneration programmes for public good and has met or exceeded government-set targets for two years running”.
But the National Federation of Builders said it needed “much more focus” if Labour’s ambitious housing plans were to succeed.
Manual use of spreadsheets led to out of date reports
According to a Homes England document from 2022 the agency lacked “basic digital capabilities” and needed “significant manual effort” to bring together data from Excel spreadsheets leading to reports that were “often out of date”.
But by 2024, several years into the IT modernisation programme, a Government review found it was still using “very labour intensive” means to keep track of its affordable homes programmes, including the continued use of Excel spreadsheets.
Rayner’s Ministry of Housing, Communities and Local Government (MHCLG) intends to do more to “recognise the wasteful spending” and keep a closer eye on its agency in the wake of the latest revelations, The i Paper has been told this week.
“Any changes to services internally will be subject to ministerial oversight,” a department source said. “We recognise the need for greater scrutiny from the department.”
Evolve was overseen by a six-strong Homes England committee that included the agency’s current chair Pat Ritchie and three other members of its current board, including two senior MHCLG officials.
Tens of millions spent, years after concerns raised
Homes England has admitted internal concerns were being raised about the “opaque” scheme as early as 2021. But it was not closed until May this year, by which time taxpayers’ total bill for the project had reached £117.6m, Homes England has now told The i Paper.
More than a quarter of this money – £34.3m – was spent over the last 2024/25 financial year. And Homes England’s latest accounts, published last month, show this spending included a £1.4m “irregular payment” to management consultants in January 2025 “without an approved commercial contract being in place”.
The 2024/25 spending came after fresh doubts had been raised about the effectiveness of the scheme.
In March 2024, a review by consultancy giant KPMG for Homes England uncovered “very significant issues” with Evolve. The i Paper has finally seen review’s report after five separate requests under Freedom of Information law. It reveals the consultants had concluded then that the project was “impossible to deliver”, though it later upgraded its opinion to “very challenging”.
Homes England staff told the consultants that the scheme was “closed and secretive”. KPMG reported that: “Colleagues did not believe that the programme scope was achievable and there were significant differences of opinion as to what that scope was.”
‘Cash could have funded thousands of new homes’
A senior director in a large housing association told The i Paper that the Evolve was a “sorry tale of misplaced belief in transformation snake-oil”. “Enough public money to fund thousands of new homes has gone up in smoke and nobody has truly been held to account,” they said.
National Federation of Builders head of policy, Rico Wojtulewicz said: “House builders have had long-standing difficulties working with Homes England in some parts of the country and this still hasn’t been resolved.
“This £117m spend could have gone a long way to strengthening its role in engagement and delivery. Homes England will need much more focus and Government support if it is to help deliver Labour’s new towns project and the affordable homes programme.
“If they don’t have that they could be given £1bn to modernise themselves and still not deliver on this ambition.”
A former director of Homes England who first flagged concerns about the scheme to The i Paper last year described the KPMG report as “damning”.
“It highlights that Evolve had poor governance and budget control and that it failed to achieve its main objectives,” he said.
They calculated that 3,360 new affordable homes could have built with the £117.6m, based on the £35,000 grant per home given to developers in the south of England when Evolve was running.
But Homes England said it would have paid for fewer homes, quoting a higher 2025 figure for the funding needed for affordable housing. On that basis the Evolve money could have funded around 1,050 new homes.
Homes England originally set out to save £268m through the efficiencies Evolve was supposed to create. Today it “estimates” that the IT products it did produce will eventually deliver “up to £95million in productivity benefits over 10 years”.
Home England’s apology for its ‘failings’
“We are clear that our internal programme Evolve fell short of its ambitions,” a spokesperson said. “We apologise and take full responsibility for these failings and are actively learning from the experience to strengthen future delivery.”
They added that since 2018, Homes England had “provided more than £10.1bn in grant funding for affordable housing”, “supported the sector to start construction of more than 278,000 homes, complete more than 256,0000 homes, and unlocked land capable of providing nearly 498,000 homes”.
A Ministry of Housing, Communities and Local Government spokesperson said: “Taxpayers must get value for their money, and we’ve decisively stepped in to make sure Homes England rightly learns from past mistakes.
“The Housing Minister set out seven immediate priorities for the agency, including achieving best value for money for the taxpayer, and we will continue to measure their work against these objectives.”