Sunday, 01 March 2015

Goverment’s public spending cull puts thousands of new homes under threat

HCA cuts threaten 7,000 homes

More than 7,000 new homes are under threat as a result of a £610 million package of funding cuts and spending freezes.

The Homes and Communities Agency announced the changes on Tuesday as part of a £6 billion package of government savings.

Cuts to house building programmes total £230 million, while some HCA spending is now on hold until after the emergency Budget on 22 June.

The second round of funding for the £420 million Kick-start programme, aimed at funding work at stalled sites, will lose £50 million. The £2.4 billion national affordable housing programme will be slashed by £100 million. It is estimated that Kick-start will lose 559 homes, based on a grant rate of just over £84,000 per home and NAHP will lose 2,223 homes based on a grant rate of nearly £45,000 per property. Uncommitted NAHP funds are also on hold. The HCA will cut £30 million of funding for Gypsy and Traveller sites and £50 million from the housing market renewal programme allocations announced in December, subjected to consultation.

A list of 108 Kick-start projects to have their funding cut or frozen has been published by the agency. It would not give a total value for the frozen NAHP and Kick-start schemes, but the funds would produce 3,820 homes if a grant rate of nearly £45,000 per home was used.

Local authority new build schemes worth £59 million covering 912 units are also on hold until after the emergency Budget. The affected schemes have been shortlisted but no contracts have been signed.

The government announced there would be an extra £170 million to fund 4,000 affordable homes but this will simply lessen the hole in the HCA’s budget, which would otherwise be £780 million, and will not be used for a new bid round.

Sir Bob Kerslake, chief executive of the HCA, said the agency would ‘make sure that the impact [of the funding freeze] is understood’ ahead of the emergency Budget in June and the comprehensive spending review in the autumn.

He said it was not yet known how the housing market renewal cut would be split between the pathfinders but the working assumption was that they would each take a 20 per cent cut, which would vary depending on their spending commitments.

He said funding for arm’s-length management organisations had not been affected and that mortgage rescue funding would also continue.

David Orr, chief executive of the National Housing Federation, believed area-based grant, which pays for council services including supported housing, gap funding and funding for homelessness schemes had also been protected.

The £6.2 billion programme of government cuts for 2010/11 also included £1.165 million of local authority savings and the lifting on the ring fence on £1.7 billion of their grants. Overall the Communities and Local Government department must cut £780 million of its general spend and £405 million of local government cash.

Readers' comments (10)

  • Surprise, surprise!!

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  • Rick Campbell

    These are just the first cuts - other cuts may well be deeper. In around around 9 months time there may well be others - the offspring of the union of Dave'n'Nick with George as midwife.

    "Be careful what you wish for" obviously wasn't in a lot of peoples' minds in the period before the election.

    On the bright side though - it could have been worse but no doubt like 'continuous improvement year on year' we'll become used to 'continuous cutting year on year' - thankfully, my time is fast running out but I fear for those spawned in the current 'period of austerity' because they will simply know no better when their time comes.

    AS I keep saying - cutting investment in housing is simply not clever because everyone suffers especially the building trade.

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  • The country has a deficit of £168bn, one of the largest deficits as a percentage of GDP in the whole of the EU.

    We are broke.

    Cutting investment in housing is simply very clever.

    When you haven't got any money you can't spend it.

    We haven't got any money. Ergo, we can't spend it.

    Not very clever. Just common sense.

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  • Owen Hart

    This is welcome news as there is absolutely no point building a few thousand council flats to address the level of demand caused by 3 million legal and 1 million illegal immigrants since '97. Of course not all of them will be eligible for social housing but many of them will be. DM summed it up nicely:

    "Frank Field added: 'If Labour wants to influence the outcome of the next General Election, it had better start addressing white working class concern about immigration, not simply reporting on it.'

    The allocation of council and housing association homes has become an increasingly difficult problem for Labour MPs and ministers in recent years, particularly in high migration areas.
    Former Culture Minister Margaret Hodge complained last year that in her East London constituency migrant families were being given priority for homes over those with a 'legitimate sense of entitlement'.
    Waiting lists for social housing have nearly doubled since Labour came to power and are getting longer thanks to the economic crisis. There are currently around 1.7 million people on the waiting lists.
    Homes are handed out on the basis of 'need' as assessed by officials. This means that single parents and people who can show they are homeless or workless often get priority over those with jobs and longstanding local connections.
    Around one in 12 council or housing association properties - more than 300,000 homes - are occupied by people who are foreign citizens."

    So instead of supply side interventions, building of hundreds of thousands more council flats for foreigners to be housed in which we simply cannot afford, the logical course of action for the new government is on the demand side. Removals and deportations. It is outrageous that any British person should be waiting for a home because a foreigner has been housed in preference on the basis of so-called "need". Such a situation would have been inconceivable under the Attlee government which just goes to show what a betrayal of their roots NuLab actually were. Frank Field's comments in the article above were indeed prophetic.

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  • first, thank you ILAG for hitting the nail on the head and dealing with the many elephants in the room.
    Secondly Grants of 84k and 45k. there should never have been grants in the first place. thats why the cost of social housing to society is so high. If HA could only borrow the build cost, which would be covered by the rent they would receive, costs would be lower.
    Back to ILAG, with waiting list currently 20 years long no one should be given publicly funded social housing unless they can show they have paid Tax/NI for at least 10 years. and they should not be allowed to join the list untill they have 8 years of contributions. This would reduce the lists and admin costs considerably.
    The private sector, freed of endless red tape, could provide all the housing needed, like it does in other countries.
    Housing benefit should be available to families at a maximum of £100 a week per family, this would encourage many to move north where there are hundreds of thousands of empty properties.

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  • Rick Campbell

    A lot of UK nationals live abroard and if they were all to come back to the UK where would they live.

    In substandard accommodation? I do not think that would be right and fitting. We live on a small planet and in a small country on it but now appear to think that we are the only ones who should be living here - a weird and new form of imperialism perhaps?

    Just build to the level that you can afford seems to be a suggestion coming forward - so we could end up with substandard accommodation or lower numbers of properties being built.

    The government rakes in a lot of dosh in tax from building companies, the construction industry, the construction supply industry, fuel to driv econstruction machinery and all sorts of related items not forgetting income tax.

    Recycling some of the tax dosh makes sense to me if it keeps the construction "world" turning.

    I get the impression that there is support for privatising rented housing and immediately two words immediately sprung to mind - "Rachmann" and "Workhouse".

    Perhaps my simplistic and sympathetic view is outmoded or even out of context but you see I don't have a 'jingoistic' agenda and am a vulnerable tenant in housing association housing who has spent years living in the most dire conditions.

    There may be those who would wish people like me be put against a brick wall and shot. To those I would say, I will not be on this planet for much longer - that might save you the cost of a bullet (or perhaps even subsidising a trip to a gas chamber for me?).

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  • This thread defies belief - Removals? Deportations??!! I can appreciate the frustration for those with "local connections" but that can be just as frustrating to others. What if those in need are feckless NEETS who have no intention of working and are determined to milk the welfare state? Those "foreigners" (does anyone in civilised society still use that phrase? I thought it was consigned to the past along with darkies and other such enlightened terms) that are in need may make a valuable contribution to the country, given time, look at the windrush migratns, often "locals" won't take low paid jobs.

    How would you identify "foreigners" given that the majority will be EU nationals anyway? If they're not EU nationals they will probably have leave to remain. Is the next step to tackle the "supply side" something along the lines of the Chinese solution and limit children?? I say this almost in jest but I know John Bull has spoken in favour on other threads......

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  • Owen Hart

    When in doubt lie, is the lefty motto. Much though the lefties would doubtless like the see the word abolished in the interests of their ghastly all-cultures-are-equal agenda, a foreigner is still anyone who comes from a foreign country, like it or not. Not British. Got that? The electorate have whether you have or not.

    According to ONS Quarterly Migrant Worker Estimates February 2009 Table 2, the number of foreign born workers over 16 had doubled since 1997 from 1.9 million to 3.8 million.Of these 2.6 million came from outside the EU. So your statement "How would you identify "foreigners" given that the majority will be EU nationals anyway?" is a plain lie. Isn't it? Only 1.2m came from the EU - the minority - and the majority of 2.6m came from outside the EU.

    Why do you make up false statements that can be disproved by one internet search? Is that how desperate the lefties have become now? When challenged, lie. The "leave to remain" handed out by NuLab can easily be revoked. That is a political decision for the present government to make. That "leave to remain" was not granted in the levels that it has been by previous Governments prior to 1997 and, as the Neathergate affair revealed, was a purely political move by the previous administration. Research into voting patterns was conducted for The Electoral Commission in May 2005, just after the last election. The “Black and Minority Ethnic Survey”, conducted by MORI, asked which party respondents had voted for in 2005. Of Caribbean and African voters, 80% had voted Labour, 2-3% Conservative and 5- 11% Liberal Democrat. Indian, Pakistani and Bangladeshis voted 56%, 50% and 41% for Labour. The equivalent figures for the Conservatives were 11%, 11% and 9% while Liberal Democrats came in at 14%, 25% and 16%. Mixed and other categories were similar to the Asians. Go figure why NuLab opened the floodgates. It was in their interests to do so although of course not in the interests of the party's routes. Which is one reason why NuLab are now history.

    In terms of "supply side" restricting benefits and entitlement to priority housing by those who have chosen, of their own free will, to breed families that they patently obviously cannot afford to feed without the State acting as parent should also act as a break on demand as well as creating a fairer allocation system for those who contribute and have a true, historic, familial local connection.

    One thing is certain. We are broke and a sudden increase in the supply of social housing is not on the cards any time soon. That leaves only demand reduction strategies.

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  • I see short-termism and party interest is rife again despite all the hubris about the national interest.

    We have a massive deficit therefore cut spending they cry. Yet for each new social let the country saves about £2.5k per annum in HB costs given that the private sector charges 63% more to the HB bill as well as creating affordability problems for all tenants. The lack of social housing creates that dependency trap.

    The arguments then move on to the usual racist claptrap - why should we build as we are only supporting Johnny Foreigner they shout - well JF is here whether we like it or not and supporting them at 63% less cost than we do know .....

    Then even more ridiculous we have social housing let only to those who has 10 years of work - So where do they live whilst they are getting this 10 years of work then - oh yes in 63% higher cost private rented stock - but that means they cant afford to work doesnt it!!

    These racist arguments also very conveniently ignore the white indigent population who are NEETS too - if they cant or even wont work where do they live then - in the same private rented sector that costs HB 63% more and means even more unempployment guaranteed and even more cost to the public purse - ah I see now!

    Foreign born workers - well they contribute to the public purse unlike the white indigent NEETS dont they? So what has that got to do with the allocation of social housing... anyone?

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  • Ah, ILAG, admittedly I erred in one word, I put "will" instead of might - how remiss of me not to check every little thing I might post on an internet comments thread. I'll write it out 50 times longhand as punishment.

    Interestingly though I note you quote from stats relating to migrant WORKERS yet seemingly a vast number of those you may deem to be worthy by virtue of a local conection may be bleeding the welfare state with no intention of working. For what it's worth I do believe that allocation solely on the basis of need for all social properties is flawed, and I fully take on board other comments that have been made about it being a "race to the bottom"

    Hasn't history always shown us that in times of recession it's always the "foreigners" that get the blame from the indigenous people?

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