Treasury covers £140m of housing pledge
The Treasury will honour some of the spending commitments made in Labour’s housing pledge, even though the funding was never allocated.
Housing minister Grant Shapps said schemes where funding had already been contractually committed would receive their money, even though the new government had found a ‘black hole’ of £780 million of funding that had never been transferred from other departments.
The Treasury had already filled £170 million of that deficit from savings made in the first round of cuts at the start of June, but it was also obliged to cover a further £140 million which has already been spent on schemes.
An announcement on how much of the remaining pledged funding will be cut is due in the next fortnight. Mr Shapps said: ‘In the next week or two we will have an allocation which has to cover what my predecessor went and spent.
‘No decision has been made on how much of the £610 million is being cut, but £140 million has been pledged of that £610 million – it has already effectively been spent. It’s how much the Treasury think they can spare in a situation where the budgets are reducing.’
The minister was speaking before his keynote speech at the Chartered Institute of Housing’s annual conference in Harrogate. He also said that he was not concerned about the implications of changes to housing benefit for social landlords.
Plans announced in Tuesday’s emergency Budget mean from 2013 anyone claiming jobseekers’ allowance for more than a year will see a 10 per cent drop in their housing benefits. Figures in the sector condemned the move, but Mr Shapps said he was not concerned that social landlords’ viability would be damaged by a drop in their income.
He said: ‘It does not come into effect until 2013/14, by which point we would hope that incomes will be growing.’
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Readers' comments (2)
Len White | 26/06/2010 9:45 am
This is a curious and one-sided story. Ex Housing Minister John Healey is already on the record denying the charge that the 'Housing Pledge' was unfunded, making the entirely reasonable point that he simply could not have made the announcement of £1.5bn extra for housing to counteract the recession - and started spending it - without the full agreement and backing of the Treasury.
I have to say that for many outside observers like me the more likely story is that this is a cover for making disproportionate cuts in the housing capital programmes and blaming the previous government for leaving a black hole. It is disingenuous for the government to cut such a vast amount from housing and then claim, as George Osborne did in the budget, that they are protecting capital spending as a matter of principle.
Cutting back on housing investment spending has the obvious result of fewer homes at a time when the shortage is getting more serious every year, but it also fails to meet the objective of cutting the deficit - the multiplier effect throughout the economy means that construction is the best way of providing jobs to taxpayers and taking people off benefits.
Together with the extraordinarily damaging cuts to housing benefit, housing has borne the brunt of the cuts so far, but this is a short-sighted and self-defeating way of reducing the deficit.
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Anonymous | 28/06/2010 10:42 am
How much longer will take the LibDem to realise they and not necessarily the con servatives will be the ones paying for the policies being pursued by Shapps and co?
because come the nerxt genenral elections, people anger will be on LibDem for having joined in a coalition allowing Mr Shapps to indulge in attacking the most vulnerable in society.
The funny things will be is that Mr Shapps as the chief culprit will retain his seat while Nick Clegg has been duped in losing his and most of his party colleagues.
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