Sunday, 19 April 2015

Shapps defends ‘radical’ social housing reforms

The Communities and Local Government department had an ‘enormous’ and ‘over-bloated’ budget before it was cut in half, according to the housing minister.

Grant Shapps said the department would have needed an unrealistically huge budget if it had set out to build enough homes to halve the housing waiting list. ‘You would need £50 billion quid to do this,’ he said.

He said there was ‘no way’ that was realistic even in the most benign conditions.

The government’s comprehensive spending review, published yesterday, cuts the CLG budget by 51 per cent by 2014/15. If £1.6 billion devolved to local authorities is taken out of the equation, the department’s budget falls 33 per cent, with capital spending cut 74 per cent.

Mr Shapps added plans to introduce new forms of fixed-term tenancies, where future tenants would pay up to 80 per cent of the market rent, were ‘clearly the most radical shake-up [of housing] since the war’.

But he said the plans would not mark a death of the existing function and concept of social housing.

‘It doesn’t destroy what’s there, it builds on it. We have got 4.2 million affordable social homes at the moment. They are not going to disappear. In the spending review period we are building more.’

He said that he did not foresee that tenants would ever have to leave their homes once their fixed-tenancies were up – even if their circumstances had improved dramatically. They may have to pay more than an 80 per cent share if they were no longer in housing need, he said.

‘There would be no problem staying in your home,’ he said. ‘It would be illogical for a landlord to say I have got 80 per cent or I have got 90 per cent [of market rents and ask people to leave]. There is no reason to think you would have landlords chucking people out.’

The new tenancies would still give people certainty, he said: ‘What you know is that for the 10 years you can expect your tenancy to cost up to 80 per cent of the market.’

Mr Shapps also denied that he had backtracked on pledges made before the election to maintain security of tenure for social tenants.

‘Read our lips,’ he said. ‘We said we would respect the security of tenure of social tenants. Anyone who is a social tenant… nothing has changed. It can’t make sense to then say “right, we will never, ever change the way that we do social housing in this country forever”.’

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