Current policy of increasing reliance on the private rented sector and allowing the stock of sub-market rental housing to dwindle is not “fiscally sustainable and economically efficient” says the SHOUT** campaign in its submission to the 2017 Budget.
SHOUT’s core proposition is that there should be a long term government commitment to a sponsored programme rising to 100,000 new units a year of housing at genuinely affordable rents, alongside other tenures, which would:
- bring down the cost to government of supporting low-income households
- address the longstanding and serious economic weakness of under-supply of housing which has been so resistant to other policy approaches
- via Right to Buy or formal rent to buy schemes, offer a pathway towards home ownership;
- help address pressures on public services, notably health and social care.
The long term case for building social rented homes was set out in 2015 in the report for SHOUT by Capital Economics ‘Building New Social Rent Homes: an Economic Appraisal’, updated in 2016 to add additional analysis of the implications of alternative possible outcomes from the UK’s exit from the European Union.
SHOUT’s programme would increase the requirement for public borrowing in the short term, with a peak impact on the PSBR of 0.13% in 2020 as the costs kick in but the benefits are yet to be realised. SHOUT points out that the positive impact on the public finances in the longer term are extremely strong and that there would be significant benefits in other programmes, especially in health, education, and social care.
They also point out that the government is already committed to spending over £40 billion by 2020-21 on programmes and incentives designed (not always very effectively) to boost housing supply – there is scope for reallocation within this total to fund the proposed increase in social rented supply. Homes are also an asset on the public balance sheet and generate a permanent income stream.
SHOUT’s submission also addresses two other important issues, both of which require policy to be set consistently across both CLG and DWP programmes.
- the need for a stable, fair and sustainable settlement for social housing rents – the rent regime has become muddled with unclear objectives and unpredictable outcomes as important changes in rents and social security payments have been introduced. Policies for housing investment, rents and welfare must be properly co-ordinated. SHOUT is doing more work on rent policy for publication at a later date.
- ensuring that existing and new supported housing is viable: the current uncertainty caused by restricting benefit to the local LHA rate needs to be lifted in the Budget, and SHOUT supports recommendations made by the DWP and CLG Select Committees for a new funding mechanism for supported housing.
The Budget submission is an excellent summary of the case for additional investment including many charts.
**SHOUT is a volunteer – run campaign making the case for investment in genuinely affordable homes and demonstrating the positive effects that such housing has on people and communities. SHOUT can be followed on Twitter at @4socialhousing and its website is http://www.4socialhousing.co.uk