The PAC has slammed a new plan that would help fund new homes via higher rents. The welfare reforms of the government that are supposed to go into effect at the start of the new year could be undermined by new plans to finance the development of almost 80,000 new homes by charging higher rents.
The Public Accounts Committee is concerned that the Affordable Homes Programme The Public Accounts Committeeis going to help out the Housing Benefit bill. The Affordable House Programme is supposed to be focused on building more affordable homes that can be sold and rented on until March 2015.
£1.8 billion will be provided from the Department for Committee and Local Government programme to the social housing providers that are tasked with making sure the homes are built. The funds and building activities will also be managed by the Homes and Communities Agency via agreements with local authorities, housing associations, and councils’ management organizations.
The average grant that is needed for each home that is built is set to be close to £20,000, a third of which used to be provided without question from the National Affordable Housing Programme run by the government. However, MPs have made it clear that they are not sure if this will really be the best value investment for long term reasons and therefore the money may not be pledged in the future.
The concern is that if a reduction in grant money was made then rents would have to be increased making the affordable housing less affordable for those in need. It will then lead to more people needing the benefits of the Housing Benefit bill and simply increase spending there by about £1.4bn over the next three decades. Thus, the entire system is currently under review to see how to fix the problem without ‘shifting costs.’