The government must act urgently to address a lack of new social housing, and the Grenfell Tower fire shows this is a crisis that can no longer be ignored, according to the head of the organisation representing housing associations.
In a speech to the conference of the National Housing Federation, David Orr will say it is “absurd” that the government is spending less on social housing now than in the 1990s while paying increasing sums to private landlords via housing benefit.
The tragedy at Grenfell Tower in west London, in which at least 80 people died, highlighted the long neglect of social housing, Orr will say.
“The prime minister is right that we’ve not paid social housing enough attention. After the tragic fire at Grenfell, this crisis can no longer be ignored. The government must be bold and make a break with the past by making money available to build genuinely affordable homes.
“There’s more than a billion pounds that remains unspent on Starter Homes. Let’s put this money to use and let housing associations build 20,000 of the genuinely affordable homes the nation needs.”
Orr, who is chief executive of the federation, is expected to argue for a complete shift in government policy.
Since 2010 the government has overseen a massive reduction in the provision of homes for social rent, instead focusing on “affordable” rents, which can be as much as 80% of the market value.
A report by the federation, produced to coincide with the conference, says the amount of capital committed by the government to homebuilding has fallen from £11.4bn in 2009 to £5.3bn in 2015.
In combination with this, the decision to stop public funding for social rented homes led to a decline in construction of these from 36,000 starts in 2010/11 to slightly over 3,000 the next year.
The report says the only new social rent homes now are coming either from previous funding commitments or through cross-subsidies within housing associations projects, amounting to just under 1,000 starts in 2016/17.
It says the increase in rented housing stock has instead come from the private sector, with a 57% rise in real terms over the past two decades.
The federation says private rents are on average £21 per week more expensive than their social let equivalents, meaning that over the last 20 years the annual spend on housing benefit has risen from £16.6bn to £25.1bn.
There is another cost, the report says. “Not only is it 23% more expensive to house someone in the private rented sector than social housing, but none of that money increases the supply of new homes.
“Social landlords do reinvest in new homes, building a third of all new homes last year including for social rent from their own funds, but the same does not happen in the private rented sector.”
In his speech, Orr will argue that this is an unsustainable situation. “It is absurd that we’re spending less on building social housing than we did in the 90s – there are even more people today on housing waiting lists than then, despite increasingly stringent criteria.
“We know we need more, better quality social housing. And yet, rather than putting public money into building the homes we need, we are propping up rents in a failing market. Ultimately, this is poor value for the taxpayer and has a knock-on effect on everyone struggling to rent or buy.”
John Healey, the shadow housing secretary, said: “Conservative ministers have washed their hands of any responsibility to build the homes families on ordinary incomes need. Ministers try to hide their failure to build more affordable homes by branding more homes ‘affordable’. The Conservative definition of affordable housing now includes homes close to full market rent and on sale for up to £450,000.
“Public concern about housing is around the highest level for 40 years. Millions of families are struggling with high housing costs. Faced with this, ministers have turned their back on the way they can help most – by building low-cost homes to rent and buy.”
guardian.co.uk © Guardian News & Media Limited 2010