The coalition was wrong to claim that a “black hole” in the outgoing Labour Government’s books meant housing budgets had to be slashed twice this year, according to a report on newly released figures.
The Homes and Communities Agency, which funds and oversees social housing schemes, saw its funding cut by £220 million last month, on top of a £230 million cut announced in the emergency Budget. Tory Housing Minister Grant Shapps said that £780 million of funding promised towards Gordon Brown’s “Building Britain’s Future” initiative in 2009 – had not been allocated by the Treasury.
However, Local Government Chronicle says figures released by the Department for Communities and Local Government under Freedom of Information laws show there should have been more than enough surplus money to fund the programme.
Shadow Housing Minister John Healey this week leapt on the findings. “This FoI evidence confirms that ministers’ claims of a funding ‘black hole’ in housing are wrong. They have been caught out talking up the deficit to justify severe spending cuts. The Lib-Con Government has been deliberately misleading the public and the House of Commons, and the guilty ministers should now come clean and apologise.”
According to the release, the Treasury agreed in principle with DCLG that it would fund £610 million of the £780 million needed to fulfil the £1.5 billion pledge, which was aimed at boosting housing targets by 20,000 in 2009-11. The money was to come from underspend by DCLG and other departments. The figures also show that DCLG alone underspent by £1.1 billion last year, and £810 million the year before.
Mr Shapps had previously said: “Cash for affordable housing has run out. Half of the money simply was not there. We are left with pledges and money that has been suggested that is not in existence.” In the end, he decided to fund only £390 million.
The revelation comes after Labour criticised the Government for offering councils bonuses for every new home built in their area. The New Homes Bonus will be funded with cash from the local government revenue grant account. Mr Healey called the scheme “robbing Peterborough to pay Poole”.
