The big cash backlash
Two weeks ago, I wrote on these pages that annual housing starts in England - currently languishing at around 80,000 - may yet enjoy an unexpected fillip under the coalition government.
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As evidence for this I took the £170 million of savings that chancellor George Osborne had surprisingly decided to allocate to secure the construction of 4,000 affordable homes. Was this a welcome sign of the government prioritising housing investment in the face of well-documented cuts?
As the dust has settled, this conclusion looks somewhat shaky to say the least. It has emerged that the £170 million was allocated to the Communities department in a desperate bid to plug what housing minister Grant Shapps this week claimed is a £780 million ‘black hole’ in the social housing budget.
Mr Shapps claims that his predecessors in Eland House were effectively making unfunded housing spending commitments and that, as a result, the money for building affordable housing has ‘run out’. In an attempt to fill that hole, he has been running the rule over £4 billion of spending plans and put question marks against as much as £1 billion of projects approved in 2010. We are promised more details after the emergency Budget on 22 June, but in Mr Shapps’ own words, the cuts will be ‘painful’.
While the revelations around the apparent ‘mess’ that the CLG’s housing budget was left in by Labour are deeply disturbing, it is what the current ministerial team does to ensure that a viable affordable house building programme emerges on the other side that matters now.
The initial signs are not encouraging. The populist step taken this week to abolish housing density targets and prevent so-called ‘garden grabbing’, while having some merits, will result in fewer homes being built in areas where they are often needed most.
So far, Mr Shapps has played the blame-my-predecessor game to the letter of the political textbook. Where he has yet to be tested is in fighting for the resources that will be needed to allow the supply of new homes to increase. It may be easy to criticise Mr Healey and his predecessors now, yet they fought for housing investment. Will Mr Shapps be as committed (and effective) in the run-up to the autumn spending review?