The Conservative government has outlined what they want from social landlords and it proves they are economic illiterates and their policy is wholly ideological and damaging to the taxpayer and public purse.
Government gives incentives to social landlords to deliver new social housing or subsidy (in common though errant parlance) as they have always done and in return they get lower rents which reduces the costs of housing benefit to the taxpayer and public purse.
Government put money in to get a better return in short and currently average HB paid to social housing is 23% less than private rented housing benefit at £88.72 per week in social housing to £109.09 per week average HB in private.
That is how the system works and why Government subsidises social housing.
Yet this Conservative Government has said that social landlords will only be getting this ‘subsidy’ IF they deliver the higher cost affordable (sic) rent model homes and won’t get it if they deliver lower cost social rent homes.
Here is what that means in actual figures which eases explanation.
A 3 bed property from a housing association in Ealing, London rents for £139 per week at a social rent level yet rents out at £310 per week if it is the affordable rent model. As both of these would receive full housing benefit the Government is saying we will subsidise the social landlord but ONLY if you charge the taxpayer £310 per week and not if you charge the taxpayer £139 per week!
This is economic incompetence of the highest order – a position of we will give you money only if you charge us far more in return!
Here is what the 53 page document says which makes it clear that ONLY the much higher cost affordable (sic) rent products will be funded:
It reaffirms this when we see what is says about new properties at the much lower social rent level:
Again I will repeat the figures from above which are actual figures and this Conservative government is saying you can have some money IF AND ONLY IF you charge the taxpayer and public purse £310 per week in housing benefit AND NOT have the money if you want to charge the public purse £139 per week in housing benefit.
THIS IS ECONOMIC LUNACY AND INCOMPETENCE.
The only reason for this madness is ideological, a political imperative from this Conservative government which is a crazy deal for every taxpayer and voter.
I am keeping this short and sweet and devoid of many moral arguments as the facts reveal this Conservative government is economically incompetent and wholly ideological when it comes to social housing policy. They have proved that by their own hand as the above explains.