As part of the Comprehensive Spending Review in October 2010, the Government announced that by 2015 it was reducing spending on new social housing by 70%. Instead it was creating a budget of £2.5 billion to spend on new build social housing, these properties would have rents set at 80% of the market rate and the money generated would be used to build more properties. The Government calculated that this scheme would ensure that 56,000 new homes would be built by 2015.
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However the memo, which was leaked from the Department of Communities and Local Government, which is responsible for social housing, admitted that the 56,000 target was unattainable. It said: "Initial analysis suggests that of the 56,000 new affordable rent units up to 23,000 could be lost." It is understood that this is because of the Government's plans to cap benefit payments, making it impossible for developers to recoup rents at 80% of market value. The problem is more likely to affect the building of family homes than smaller flats.
George Guy, Acting General Secretary of UCATT, said: "The Government's own department responsible for social housing, has realised this plan will be an unmitigated failure. We are already struggling with a massive social housing shortage, due to decades of underfunding and these policies will make a bad situation far worse."
He added: "Already thousands of families are locked into the misery of living in inadequate housing, which massively decreases their life chances. The Government must admit its failure and restore funding for council and social housing and rents that tenants can afford to pay."
(CD/KMcA)
