Less for Less for London: Boris in a spin over affordable housing

Boris ‘codswallop’ Johnson’s failures in housing are becoming clearer as the London mayoral Election campaign hots up.  It may be that his calamities in other areas achieve bigger headlines – dismissing the importance of the hacking scandal was a very big misjudgement, and losing so many senior police officers seems slightly careless – and he has begun to show a grumpy side to his character that belies his carefully crafted jovial upper class twit image.

London was starting to do well in housing when Johnson took over in 2008.  Ken Livingstone’s London Plan and Housing Strategy policies were beginning to bite and have real effect, policies such as the 50% affordable target across London were well known and understood by developers, and, despite the global financial crisis, Ken had secured the largest housing budget for decades from the Labour Government.  The Homes and Communities Agency outturn statement confirms that expenditure between 2008 and 2011 (ie the period covering Ken’s planned programme) in London was £3,753m, £1,251m a year over three years.

The newly announced programme of £157m a year for four years represents a cut of 87% and the gap will have to be made up by much greater housing association borrowing.  In April Stephen Howlett, then Chair of the G15 Group of major Housing Associations, told the London Assembly Planning and Housing Committee: “I think one calculation is that, to deliver the Mayor’s programme, will take as much private money over the next four years as associations have borrowed since 1988 to deliver the homes in London. Those exact figures are open to comment but I have to emphasise that housing associations in London will be taking on enormously increased debt and risk as a result of this.

Commenting on the announcement by the Mayor and the Homes and Communities Agency on the allocation of funding for affordable house building to London, Nicky Gavron AM, Labour Group Spokesperson for Planning and Housing on the London Assembly, said:

Despite the Mayor putting a brave face on it, London is getting less for less.

The new information is that the Mayor has been given only £627 million to spend on affordable housing between 2011 and 2015. This is a cut to London of 87% compared with the previous funding round.

From 2008 the last Government gave London £5bn to spend on affordable housing, of which £3.7bn was used to deliver 50,000 affordable homes by 2011. Johnson missed this deadline and £1.1bn of this new package is to finish the job and is committed to homes  already in the pipeline.

To make up for the Government’s cuts, the private sector contributions of £2.5bn announced in his press release will come from borrowing by housing associations. This is more in four years than they have collectively borrowed since the late 80s. This model  of funding is not sustainable.

The settlement also confirms that 1,500 homes in the pipeline and funded under the previous Government’s programme as social housing – the lowest-cost housing for rent, which is so desperately needed – have been lost in London because they will now be converted to the so called ‘Affordable Rent’* model. In many cases this will double rents for low-income households in London and price many families out of the housing market.

In the context of housing benefit caps, welfare reforms and rising homelessness, the growing need in London is for low rent family housing. But this deal is particularly damaging for families. We understand that only around 30% of the homes will be family sized. This seriously undermines Boris Johnson’s pledge that 42% of new homes should be for families, a fact omitted from his announcement.

*The London Assembly Planning and Housing Committee recently published a report on the impact of the Affordable Rent model on London, the findings of which are summarised here.

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One Response to Less for Less for London: Boris in a spin over affordable housing

  1. Pingback: Why are they keeping quiet about ‘affordable rent’? | Red Brick

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