Well this is it, then. Across the housing sector and, more importantly, within the many households all over Britain living in poor housing conditions and stuck on council waiting lists, the reality of the housing investment cuts that have been made is sinking in. And meanwhile, fears about the larger ones in the wings will have been realised after this week’s emergency Budget announcement. A big penny is beginning to drop.

The concern is that as housing and physical regeneration are not protected by ring-fencing and as both are heavily reliant on capital investment and capital spend, then they will be easier to cut than existing revenue services. These areas will fare disproportionately badly over the coming months and years.

Deep impact

It is now quite likely that new affordable house building will fall to record lows with all the consequent social implications. There will be a knock-on adverse impact for private residential development too. The market over the next couple of years will continue to be weak as higher unemployment, now stoked by public sector cuts, kicks in.

I was also less than impressed that the coalition government, in the unlamented spirit of spin of the early years of New Labour instead of the openness and transparency that was promised, attempted the trick of saying that it had found £170 million for affordable house building when, at the same time, it had slashed the overall housing investment budget by £780 million. I suspect this attempted sleight of hand convinced no one.

The implications of these decisions are immense in constituencies like mine.

So what should happen? First, as highlighted by this magazine’s recent House Proud campaign, a realisation that investment in housing - new homes, improving conditions and estate renewal - has significant economic, social and indeed fiscal benefits contributing to the nation’s well-being.

Good investment

Good quality, affordable housing improves life chances, helping to reduce health spending, cutting energy costs for families and enhances children’s opportunities to learn. New build programmes generate employment as well as valuable assets and the economic activity resulting from the projects produces additional tax revenues.

There are two other policy decisions that could be made and if there is a real belief in localism in Whitehall, any government should consider pursuing these.

The first of these is to implement the housing revenue account review that former housing minister John Healey set in motion (Council housing: a real future). This offers the prospect of self-financing for council housing which should give stability and considerable certainty for local authorities in place of the vagaries of periodic announcements on allowances and subsidy levels.

The second area relates to devolving housing investment budgets direct to councils from the national Homes and Communities Agency, or in the case of London, via the elected mayor. The distribution of the, no doubt significantly reduced, available investment would be based upon the borough investment plans which emerge from the HCA/council single conversation process. It would then be for the individual councils to determine the balance of priorities between new affordable homes, investment in estate renewal and decent homes spending. Surely if there is a genuine desire to promote localism such decisions must be devolved and the local council will be held to account for those decisions.

Leadership race

One of the benchmarks for the Labour leadership that will be decided in September must be that as well as focusing resources and attention on enabling people to realise their aspirations, we must at least devote equal priority to meeting the basic needs of people at risk of being marginalised. Aspiration does not simply mean owner-occupation, but also good quality private rented and social housing. The test for my party should be how it helps to create a society which is at ease with itself and surely such a society is one whose collective values and actions do not tolerate gross inequality and poverty.

From my perspective, progressive housing and regeneration policies play a vital role in that vision. However, I feel things are going to get much worse over the next few years. As someone once said: ‘things can only get bitter’.

John Cruddas is Labour MP for Dagenham

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