Financial Viability of the Social Housing Sector: Introducing the Affordable Homes Programme, Thirteenth Report of Session 2012-13, Report, Together with Formal Minutes, Oral and Written Evidence

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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. The Department expects the Programme to support the provision of approximately 80,000 homes in the four years from April 2011 to March 2015. Through negotiation the Agency reduced the average grant per home to 20,000; a third of that under the previous programme. 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. On the one hand more of the new housing, may be taken up by people on higher incomes so that the programme fails to meet the most pressing housing need. At the same time, the poorest tenants may be unable to afford the higher rents. Those who receive higher benefits may in turn find it even harder to find employment that pays enough and so there will be more people who are more likely to be locked into benefit dependency. Delivery of the new homes is heavily skewed towards the end of the Programme, with many due to be built in the final year on sites which are not yet confirmed. This leaves very little room for slippage

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