Spending cuts hit plans for half a million homes

The umbrella body for housing associations says figures in the government’s pre-Budget report suggest cuts of 17.98 per cent, and has worked out the impact this would have on the building of affordable homes.

Prime minister Gordon Brown announced in July 2007 plans to build 3 million new homes by 2020, of which one million would be affordable.

But the NHF says a 17.98 per cent cut would mean only 440,000 of these would be built by 2020, leaving a 556,000 home shortfall. If the spending cuts continue it has calculated it will take until 2038 to build the million affordable homes.

The Fed also believes the cuts will lead to 278,000 jobs and apprenticeships in the construction industry being lost or not created.

The Institute for Fiscal Studies has calculated the government will need to cut budgets from all departments by an average of 17.98 per cent, to reduce its budget deficit while protecting spending on its stated priorities of health, policing and schools.

Federation chief executive David Orr said housing should have the same ‘untouchable status’ as health, education and policing.

‘A swingeing cut of 17.98 per cent to the budget for new affordable homes would deepen the national housing crisis and lead to the loss of thousands of jobs and apprenticeships,’ he said.

‘Reducing the number of new homes by such a huge degree would kill off the dreams of more than a million people in desperate need of decent, affordable housing - leaving many to live in cramped, unsuitable conditions for a generation.

‘As bad housing is closely linked to poor health, poor educational attainment and higher crime rates, ministers should give funding for the house building programme the same untouchable status as health, education and policing - and protect it from the coming savage cuts.’

Housing minister John Healey said in response: ‘While the NHF are rightly lobbying government to do more they are in danger of missing the bigger political picture. Of course the public finances are tight but this government continues to demonstrate our long-term commitment to affordable housing, whether through the extra £1.5 billion investment of the housing pledge or the PBR’s boosting of support for first time buyers.

‘The Tories not only opposed us, they also proposed a £1 billion cut in last year’s housing budget that would have seen 9,000 fewer homes built and the loss of many jobs in the construction industry. Taking this as a clear indication of Tory priorities, the NHF would do well to consider the threat a Cameron government would pose to affordable housing.’

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