The Public Accounts Committee (PAC) is a very powerful Parliamentary committee which has the job of scrutinizing government plans to check that they stack up and that they are getting value for money.
In a recently published report, published >> here, they turn their attention to the Department for Communities and Local Government (the Department) and their house building programme.
This is intended to deliver some 80,000 new homes by March 2015.
The Public Accounts Committee are not pleased.
‘Saving money’
One interesting thing they point out is that the Department is ‘saving money’ by reducing its grant to the builders under an agreement that the builders are then able to charge more rent.
But, as the report points out, if the tenants are on benefit, that just shifts the cost from one department to another.
Here are a few more of their conclusions:
The Department has not done enough to understand the impact of these higher rent on tenants.
Meaning that
- the poorest tenants will be excluded
- tenants on benefits will be in a ‘benefit trap’ as it will be hard for them to find employment that pays enough to fund their housing needs
The Department should do more research into these issues (says the PAC) and use the result of the research in future plans
(Incidentally, even proper ‘affordable housing’ is not really affordable – see my post >> here about a report on this in September 2008.)
The allocation of funds does not focus on areas of greatest need
The higher rent levels will mean that only the ‘richest poor’ will benefit.
The PAC note that in some areas in London, housing has been going to couples rather than families. This is not right.
The Department and the Agency (say the PAC) should ensure that decisions to allocate resources in future social housing programmes prioritise areas of greatest need and target families in greatest need.
Also
- The shift of resources from capital grants to increased housing benefit is not really in the public interest
- There is a risky delivery programme with ‘little room for slippage’
- It has taken advantage of housing builders ability to borrow, which may not be available in the future.
Phew!
You will find the report online >> here.
Thanks to the Garden Court housing bulletin which alerted me to this report
We’ve just made the decision to move to a less desirable area so that we can afford a bigger house and our children can have their own rooms and a bigger garden. The children have also just moved schools and it was no big deal.
It’s no surprise that land and constuction prices in the South East are higher than anywhere else. It’s always going to cost the government more to provide housing in this area.
Perhaps the answer is greater mobility? Shouldn’t people have an obligation to consider moving to more affordable areas if they can’t afford to live in the capital?
How practical is it for people in receipt of LHA to move from one area to another? There do seem to be incentive schemes for people moving out of certain boroughs (removals paid etc).