Yesterday's budget may have included some
unexpected announcements on savings, beer and bingo, but there were
few surprises on housing.
Most of what the Chancellor mentioned in relation to housing had
been pre-announced or widely expected.
£150 million in loans for estate regeneration - mentioned in the
Autumn Statement; a new garden city (more accurately a small town)
at Ebbsfleet - previously announced in December 2012.
The extension of Help to Buy had been widely expected, although
the extension for a full five years was rather more than the
development industry had dared to hope for. A City Deal
decision for Cambridge had been in the pipeline for a while and did
not need to be saved up for Budget day.
One new proposal buried deep in the paperwork was a consultation
on a Right to Move for social tenant who need to move for work
Despite some heroic arithmetic totalling the impact of these
announcements to 200,000 new homes, the overall impression is that
the Government is content to press on with business as usual in
housing policy, hoping beyond hope that economic revival and market
forces will bring the much-needed improvement in housing
The shadow hanging over this Budget was, of course, the fact that
the Government has so far only achieved half of its planned public
expenditure cuts. Despite the improvement in economic
prospects, new savings will need to be found both before and after
the General Election, and any new spending commitments will have to
be financed from additional cuts elsewhere.
One area where further cuts have been clearly signalled is welfare
spending, with a proposed cap on spending on tax credits and
housing benefit for the next four years imposed by a legally
enshrined charter. Quite how this is intended to work is not
at all clear.
Social rents are set to rise by more than inflation for the next
decade, with the majority of new supply being let on "affordable"
rents. Private landlords cannot be expected to observe the
Chancellor's cap in setting rents, and the trend over the last four
years has seen the number of private tenants needing help from
housing benefit rise by 400,000.
There are only two ways the Government can overcome this
contradiction. One is by praying that enough tenants on
benefits find work to keep spending within the cap; the other is by
further decoupling benefit entitlement from the rents tenants
Yet, as Jonathan Portes, Director of the National Institute for
Economic and Social Research is quoted as saying, the move may be
no more than a gesture. "Parliament already votes on measures to
change social security budgets, so a charter makes little real
difference", he said.