31 August 2010
A conservative think-tank has criticised the government’s
policy on housing for being ‘not radical enough’, and has called for a
wide-ranging shake-up to cut public spending by an estimated £20bn a year.
A report published today by Policy Exchange argues the government should act to ‘stabilise’ house prices, as rises over the past 15 years have resulted in higher benefit costs, longer waiting lists for social housing and ‘inter-generational inequality’.
In Makinghousing affordable, the think-tank recommends meeting the upfront costs of new social housing by issuing low-interest government bonds, which would be paid back by tenants on a ‘path to ownership’ scheme.
Author Alex Morton calls for council housing sell-offs to be stepped up, calculating that selling the homes of deceased tenants could initially bring in £8bn a year.
He argues that a further £12.9bn a year could eventually be saved through lower benefit payments, due to the fall in rent costs that would result from cheaper housing. Morton also claims that social housing discourages unemployed people from finding work.
To bring this about, the paper calls for a change in planning law to increase the amount of building in in-demand areas.
Residents should be balloted on new developments near to them, says Policy Exchange, while developers should be allowed to give out cash payments to encourage people to vote in their favour.
Policy Exchange believes this reform would result in residents approving more family homes, breaking the current trend for building small flats. The think-tank also criticises the coalition government’s proposed planning reforms, which will give councils money for each new home built in their area, as ‘not radical enough’.
But the report has been slammed by the National Housing Federation as ‘deeply flawed, contradictory and of limited value to the debate’.
Chief executive David Orr said the estimated savings were ‘pure fantasy’ and there was ‘no evidence whatsoever’ that council housing create disincentives to work or cause welfare dependency.
‘What we need is a balance with a variety of housing options for people across the economic spectrum rather than a simplistic drive towards home ownership,’ he said.
