Joe Figures - some questionable assumptions on your part.
1) Will providers set the AR rents only at 80%? They are allowed to set up to 80%, meaning they can set it below 80% given certain circumstances. It would be interesting if IH would survey housing providers and get some input as to what percentage will be charged in what areas - I expect some surprises.
2) Will all AR be allocated only to welfare dependent households, or will there be a mix, with a significant proportion available to the low income employed? Your number of 200,000 is highly erroneous and misleading as it is highly unlikely all tenants of AR will be claiming full HB.
3) Your figures are skewed by London - which is representative of only 18% of HB claimants, leaving 82% living elsewhere in the UK. Therefore your average figures are not representative of the reality in the majority of locations in the UK.
4) Rents in London are on average 50% higher than national rent levels. Therefore the impact on the HB bill will be greatest here, and it will be very sensitive to the allocations policy opted for, which again your simplistic figures have not considered.
5) AR is likely to be inclusive of variable service charges. This affects your comparison of the cost of social rented against AR, by understating the costs of social rents.
The reality is the measures taken by the Government is likely to result in HB levels being restrained compared to what would happen otherwise. The increased rental income going to providers of AR will be used to increase the supply of social rented housing, and again will help to ease pressures on HB.
Joe - you complain about the HB bill but you still decline to state on the record whether you think the bill is worth paying, or whether you would prefer it phased out and scrapped. Apart from suggesting the Government has got its sums wrong - what is your point?