04 July 2012

Government accused of passing costs of new homes onto tenants


Laura Sharman

Although the Government's Affordable Homes Programme has made a good start - with providers committing to build 24,000 more homes than originally expected - key risks do remain, according to a new report.

The National Audit Office has published a report into the programme, which should see 80,000 new homes built for the £1.8bn of Government investment.

However, the report does found that key risks remain, with nearly a fifth of contracts with housing providers yet to be signed. More than half of the planned homes will not be delivered until the final year of the programme, and some providers are concerned they will not be able to charge rents at the levels previously agreed.

Amyas Morse, head of the National Audit Office, said: The Affordable Homes Programme has made a good start, with providers committing themselves to building some 24,000 more homes than originally expected.

'There are key risks, however, including the fact that more than half of the homes are planned for the final year, with no room for slippage. The final judgment on the success of the Programme will depend on how well these risks can be managed between now and 2015.'

While the new programme does mean the Department for Communities and Local Government pays less grant per home (£20,000 compared with £60,000 under the previous National Affordable Housing Programme), it does increase providers' financial exposure.

Margaret Hodge chair of the Committee of Public Accounts said: 'Of the 170,000 new affordable homes being built between now and 2015, 80,000 of those are under this government's Affordable Homes Programme. My concern is that the department is simply passing the costs of building new homes onto tenants who can ill afford to pay higher rents.

'The department has scrapped the target rent guidelines for this programme, leaving vulnerable tenants increasingly dependent on housing benefits and increasing the welfare bill by £1.4 billion. It is shocking that for every new home built under this programme, the taxpayer will have to pay £17,500 in increased housing benefit costs.'



Your comments

Shapps has moved to fantasy island with this NAO report. Not only have the industry projected much of the housing into the final year but HA's have yet to secure the funding against uncertain rent income and a significant proportion of contracts have not been signed. Furthermore the incentive is to find tenants that can actually pay .8 market rents. What is desperately needed is social housing (.5 or lower market rent) provided (but not always managed) by councils according to local need.

Patrick Newman, ex local government, Stevenage , Added: Wednesday, 4 July 2012 08:07 PM

And what about the iniquitous new 'Affordable Housing Contribution' tax being imposed on everyone even those who want to build a small extension to their home rather than have all the associated costs of moving home? My local planning authority have decreed a charge of ?2.8K paid on any development between 50/60sq.mtr rising to a staggering ?28.8K charge for a large development. And all this money is going into the hands of private developers who don't need it!!

David Hankey, Added: Wednesday, 4 July 2012 04:20 PM



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