Financial viability of the social housing sector: introducing the Affordable Homes Programme

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Posted on: 12 October 2012
By: mackene
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Filed under: News

The House of Commons Public Accounts Committee has published the results of an inquiry which examined the financial viability of the social housing sector and the Affordable Homes Programme. In December 2010, the government announced the Affordable Homes Programme, under which there is £1.8 billion capital funding in government grants to social housing providers. The Department for Communities and Local Government has overall responsibility for the Programme, which is delivered by the Homes and Communities Agency through contracts with housing providers. The Department expects the Programme to support the provision of approximately 80,000 homes in the four years from April 2011 to March 2015. The Agency secured commitments from providers to build 24,000 more homes than its initial target of 56,000. Through negotiation the Agency reduced the average grant per home to £20,000; a third of that under the previous programme. It is not yet clear whether the Programme will deliver better value for money in the long term. The reduction in the grant paid to providers for each home will be funded in part by housing providers being able to charge higher rents to tenants, leading to an estimated £1.4 billion increase in housing benefit payments over 30 years. The Programme therefore shifts cost from one department to another. The Committee argues that the Department needs to do more work to understand the impact of the Programme on tenants and its interaction with wider welfare reforms.

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