Government cuts could threaten jobs and increase waiting lists
Thursday 1 July 2010
More than 200,000 construction industry jobs could be lost or not created, and 350,000 people added to housing waiting lists under government spending cuts, a campaign group has warned.
The National Housing Federation also believes that, under the cuts, £45bn could be lost to the economy – thus damaging the fragile recovery.
The Federation fears that, because ministers are ring-fencing other budgets such as health and overseas aid, the housing budget could be cut by up to 32.6% over the next four financial years.
Independent economists at the Institute of Fiscal Studies have said that for the Government to reduce the deficit to the extent promised, areas of spending that are not being protected may have to be cut by a third from 2011/12 to 2014/15.
Devastating impact
The Federation, which represents England’s housing associations, says that if the housing budget were cut by a third:
- 142,000 planned affordable homes would not be built in the period up to 2020
- 354,000 people would be added to housing waiting lists, which are already at record levels
- 212,000 jobs in construction and related fields could be lost or not be created, and
- £45bn of spending would be lost to the economy – thus damaging the fragile recovery.
Given the devastating impact such cuts would have on people in housing need and the wider economy, the Federation says the Government should safeguard the building of affordable housing.
Federation modelling shows that spending cuts of 32.6% would reduce the number of affordable homes built between 2011/12 and 2019/20 from 426,000 to 285,000.
The modelling also shows that cuts of 32.6% to the housing budget could – over the next ten years – lead to 212,000 jobs and apprenticeship being lost or not created in the construction industry.
In addition, the modelling shows that cuts of a third – which would amount to £9.6bn over nine years – would lead to £45bn being lost to the economy by 2020, because public money given to housing associations in order to build affordable housing is matched by associations and then doubled in value as it is spent by people across the economy.
Demand for new homes
Waiting lists for affordable housing already stand at a record level of 4.5m people, and more than 2.6m people are living in overcrowded conditions – an all time high.
But as demand for new homes soars, just 123,000 homes were built in 2009/10, the lowest number since 1923, excluding the war years.
The Federation warned that the poorest communities would be hardest hit by the proposed cuts to housing, as bad housing conditions are closely linked with poor health, poor educational attainment and higher crime rates.
Federation chief executive David Orr said: 'It is clear to everyone that the amount of public money available to fund various activities in the future is going to be tight. However, it is critical that the nation keeps building affordable housing.
'If we don’t safeguard the building of affordable homes then hundreds of thousands of vulnerable people will needlessly be added to waiting lists and more than two hundred thousand jobs could be lost or not created.
'Drastically cutting the housing budget could also imperil the fragile recovery, as our modelling shows that cuts to the housing budget of one third would automatically take £44bn out of the economy over the next ten years.'
He added: 'We understand the need to reduce the deficit and housing associations are continually thinking about how to build homes while being even more effective and innovative – and maximising the value they deliver for the public money invested.
'I hope to talk to the Housing Minister Grant Shapps as soon as possible to discuss how housing associations can continue to deliver affordable housing in volume.'
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