In a statement on 27
June, Danny Alexander, Chief Secretary to the Treasury, gave
details of the government's plan for £100 billion infrastructure
investment by 2020. It includes just £3.3 billion for affordable
housing over the three years from 2015/16.
CIH described this
as "modest" - "not the 'game changer' required to make a
significant impact to alleviate our housing crisis." The £3.3
billion is expected to support 165,000 new homes, which implies a
government contribution of just £20,000 to the cost of building
each of them. The assumption is that the properties will all be let
at "affordable" rents of up to 80% of market rents.
Speaking to the CIH Conference the same day, Housing Minister
Mark Prisk said that the government would be looking for
"something for something" - registered providers bidding for
funding would be expected to demonstrate efficiencies or put in a
significant contribution from disposals or by converting existing
properties from social to affordable rents.
The Minister's speech included no mention of council debt caps -
not even to say why the government has chosen not to lift them -
and no acknowledgement of the contribution councils are making to
the supply of new social housing, or of the fact that they could do
At the same time that the government has decided to further
tighten the screw on welfare spending by lengthening the time
unemployed people have to wait for jobseekers' allowance, it seems
oblivious to the fact that its housing policy choices will almost
certainly have the long term effect of pushing up welfare
A report by Future for
London published earlier this month includes an analysis of the
progress so far of the affordable rent programme in London showing
that 3104 new affordable rent tenancies had been created by
December 2012, of which just 543 were in newly built homes, the
remainder being relets of existing dwellings converted from social
to affordable rents.
The average income of the tenants concerned was £240 per week in
the new properties, and £205 in the conversions, compared with an
average of £243 for tenants in social rented homes. Not
surprisingly, more of the tenants in the higher rented "affordable"
properties were eligible for HB - 87% compared with 83% of tenants
paying social rents.
If the same pattern applies to the affordable rent programme more
generally, it is clear that the long run impact on housing benefit
spending will be considerable. Can it really be said that this
approach offers long run value for money to the taxpayer?
See also, 'The new rent
formula - what does it mean?'