By David Williams
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.
