Government cuts 'mixed bag' for housing sector

The coalition government announced the Communities and Local Government department will be facing a budget cut of £780 million during the 2010/11 financial year while Labour’s £1.5 billion housing pledge will be reduced by £180 million.

But the government has also pledged to spend an extra £170 million on delivering 4,000 social rented homes which would otherwise have been unfunded.

Sarah Webb, chief executive of the Chartered Institute of Housing, described the announcements as a ‘mixed-bag’ for the sector.

She said: ‘It is encouraging that there is obviously a commitment here to supporting house building and investment in much needed social housing.

“Trying to herald extra money to safeguard social housing is false and a fig leaf for the serious cuts that will follow.”

John Healey, shadow housing minister

‘And we are pleased that our House Proud campaign, run jointly with Inside Housing magazine over the last five months, has succeeded in highlighting the importance of housing as part of the government’s wider agenda.

‘What isn’t fully clear, however, are the nature of cuts to existing initiatives and the impact their withdrawal could have. 

‘It also remains to be seen what reductions in funding for local government and devolved authorities could have on their respective housing responsibilities.’

David Orr, chief executive of the National Housing Federation, praised the government for ‘recognising social housing as a key frontline service.’

Mr Orr said: ‘With record housing waiting lists and overcrowding reaching epidemic proportions in many places across the country, the need for more social housing has never been greater.

‘This hopefully signals the government’s long-term commitment to protecting public spending on social housing and to tackling the country’s chronic housing crisis.’

Mr Orr said the NHF will be speaking to the CLG to clarify where the £780 million of savings will be found.

Campbell Robb, chief executive of housing charity Shelter, said: ‘The government has clearly recognised the fundamental importance of housing in creating growth and building a fairer society through its commitment to protect vital social housing investment.’

Mr Robb added that the government must protect funding for homeowner support schemes and homelessness advice services.

The call comes after communities secretary Eric Pickles ordered a review of the £285 million mortgage rescue scheme for struggling homeowners.

John Healey, shadow housing minister, accused the new government of failing to defend housing.

He said: ‘Trying to herald extra money to safeguard social housing is false and a fig leaf for the serious cuts that will follow.

‘The £1.5 billion housing pledge was fully funded with the detail set out in Parliament last July.

‘Not axeing money that is already funding a programme does not constitute new money, and this is just old fashioned spin rather than the long promised “new politics”.’

The cuts are part of the government’s plan to reduce spending by £6.2 billion immediately, a Conservative manifesto pledge which was opposed by Labour and initially by the Liberal Democrats.

More specific details of where the CLG cuts will fall will be announced in the government’s emergency budget on 22 June and in its spending review, due to be published in the autumn.

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