On 26 June, Chancellor
George Osborne will announce the outcome of the Government's
Spending Review, which will set the parameters for public spending
for the remainder of the current Parliament. Organisations across
the housing industry are lining up to persuade the Chancellor to
provide for more social housing to help boost the economy, meet
housing need and contain the future benefit bill.
Last week, the Local
Government Association's submission restated the case for
removing council debt caps to allow councils to build more homes.
This week, CIH, the National Housing Federation and the G15 group
of London housing associations joined forced to press for an
additional £2 billion in grant in 2015/15 to fund up to 65,000
additional social homes. CIH also added its voice to the call for
removal of council debt caps. Inside Housing simultaneously
launched its own Grant Britain Homes
campaign to lobby for more social housing.
The Government is resistant to demand for additional spending -
which implies extra Government borrowing - at a time when its
overriding priority is reduction of Government borrowing. The
housing industry's counter argument is that more investment now
will be more than repaid by savings later.
Extra spending on grant, or allowing councils to borrow more in
the short term, will not just help boost the economy but, by
enabling more tenants needing benefit to be housed in social rather
than private housing, yield substantial and lasting savings in
spending on benefits.
A similar argument can be deployed to make the case for housing
associations to be funded to provide housing at social rents rather
than "affordable" rents up to 80% of market value. Research carried out
by London & Quadrant and Price Waterhouse Coopers on costs in
London shows that the Government could save £5 billion over 40
years by providing £60,000 grant per home to enable them to be let
at social rents, compared with £22,000 grant for homes to be let at
80% of market rents.
Some in the housing industry may already feel that the case for
more investment in social housing is overwhelming. Others may argue
that the political dynamic makes it impossible for the current
Chancellor to take any step that could be construed as a u-turn, no
matter how compelling the arguments for it. But it would do no harm
to the argument to explore in more detail the future savings to the
taxpayer that could derive from allowing councils to expand
provision at social rents.