The House of Commons public accounts committee has called on the Government to “urgently” review its social housing policy in a highly critical report.
The report, Financial stability of the social housing sector, published today, slams the current affordable housing programme for being too limited and passing on costs to other departments.
The current programme aims to deliver £1.8bn of Government grants to social housing providers. It is a cut from previous levels but the Government expects providers to make up for the lower grant by charging higher rents.
PAC chair Margaret Hodge says there are “serious concerns” over its effectiveness and whether it represents value for money.
She says: “The affordable homes programme addresses only 2 per cent of the unmet housing need in England and its future after 2015 remains uncertain.
“With 4.5 million people in England still waiting for an affordable home, the department urgently needs to make clear how it will fund the growing demand for social housing.”
Hodge says the increased rents required by social housing providers will lead to an extra £1.4bn in housing benefit over the next 30 years.
She says: “The programme therefore shifts costs from one Government department to another, and it is unclear whether this will provide better value for money in the long term.
“Where higher rents are paid through increased housing benefit, tenants may find it even harder to find work that pays enough to be worthwhile, undermining the Government’s objective of ensuring that the benefit system makes work pay.”
Hodge says higher rents may lead the social housing to go to those on higher incomes.
Shadow housing minister Jack Dromey says: “This damning report highlights the failure of this out-of-touch Government to get a grip on the biggest housing crisis in a generation. In Cameron’s Britain, millions are left with no hope of a decent home at a price they can afford.”