Government accused over social housing funds
Only a small proportion of the £80 billion received by the government in housing tax receipts over the past 20 years has gone back into the sector, a charity claims today.
A report from the Joseph Rowntree Foundation (JRF) finds the Treasury has received a windfall thanks to the abolition of mortgage interest tax relief (MITR), income from right-to-buy sales of council housing and increased stamp duty receipts.
This money could have been used to boost the supply of affordable homes and social housing, the charity argues, but instead, the majority was invested elsewhere.
However, a Treasury spokesman questioned the JRF’s figures, and insisted that the total housing budget is forecast to grow by four per cent by 2008, with 50 per cent of the spending increase focused on public housing.
The findings will be presented at a symposium in London today, organised to commemorate the 20th anniversary of the Duke of Edinburgh’s inquiry into housing, which was seen as a landmark document in encouraging greater housing spending.
JRF chairman Richard Best said it was a good time to contrast the “striking” gap between financial gains to the Treasury and the continuing importance of meeting housing needs.
“If only a modest proportion of the government’s increased revenue were to be recycled to boost the supply of affordable homes for rent and low-cost ownership, and to improve the safety net for low-income home-owners, it could make a vital contribution to defusing the growing crisis in British housing,” he said.
The report claims the government has made about £45 billion from the sale of former council houses, yet has recycled just a quarter of this amount back into the public housing sector.
It also warns that housing associations are increasingly borrowing from the private sector in order to improve social housing, further lessening the financial burden on the Treasury.
However, a department spokesman rejected the claims of inadequate funding in social housing, and also questioned the report’s figures.
He pointed out that the 2000 budget outlined tax windfalls of £2 billion from the abolition of MITR, as opposed to the £3 billion suggested in today’s report.
Yvette Cooper, minister for housing and planning, is expected to comment on the findings when she addresses the symposium this afternoon.
