Ministers face demand for urgent answers over return of cash to Treasury
MPs
are demanding an urgent explanation from ministers after being told
that £817m allocated for desperately needed affordable housing and other
projects in cash-strapped local authorities has been returned to the
Treasury unspent.
This contributes to the continuous rise of the land values and
makes affordable housing yet further out of the reach of most of us! Why
Councils don't work with their pro-active and capable Community groups
and build locally-owned and run affordable Housing ?!
The
surrender of the unused cash has astonished members of the cross-party
housing, communities and local government select committee at a time
when Theresa May has insisted housebuilding is a top priority and when
many local authorities are becoming mired in ever deeper financial crises.
On
Monday the committee, which discovered the underspend for 2017-18, will
interrogate housing minister Dominic Raab and homelessness minister
Heather Wheeler on the issue, before Tuesday’s spring statement by the
chancellor, Philip Hammond.
He is under heavy pressure from MPs, and the Tory-controlled Local
Government Association, to signal extra help for the local authority
sector, which has seen budget cuts of around 50% since 2010.
The
acting chair of the committee, the Tory MP Bob Blackman, said: “We will
be wanting to know why this very large sum has not been spent at a time
of great strain on local authority budgets, and why it was not
channelled to other spending projects. It does not help those of us who
argue that more should be given to local authorities if the chancellor
knows money he gave last time has not even been spent.” MPs believe they
can argue for more for local authorities because Hammond will announce
that unexpectedly high tax receipts have left the Treasury with a
windfall of between £7bn and £10bn.
Speaking
on Saturday night, the chancellor said the government had gone a long
way to put the public finances back in order and was now able to pump
more into services, including housing: “We’re making good progress on
building the homes this country needs with, last year, a 20-year record
high for housebuilding. This is how we build an economy that works for
everyone.”
But Helen
Hayes MP, a Labour member of the select committee, said it was
“astonishing” that money was lying unspent when the number of social
homes built by local authorities from government grants had dropped
dramatically since 2010. “This is the biggest issue for families up and
down the country, including in my Dulwich and West Norwood
constituency,” she said. “It is simply astonishing and unacceptable that
there is so little urgency being shown.”
For
the last 30 years, councils have cut back council housebuilding in the
face of severe budget cuts. Local authorities have also been discouraged
from building by the government’s “right to buy” scheme, which allows
tenants to buy council properties at a 40% discount.
Hundreds
of councils have set up their own property development companies to
build homes and get around the rules. But progress has been slow, in
part because of the threat from ministers that they might extend the
right to buy to the new council-owned companies.
Shadow
housing minister John Healey said housing and local government
secretary Sajid Javid’s department had also failed to spend £220m of
funding allocated to affordable housing last year. “Sajid Javid needs to
explain why he is selling families short by surrendering much-needed
cash for new homes,” he said.“If the secretary of state can’t defend his
department’s budget from the Treasury he should give the job to someone
who can.”
A housing
ministry spokesman said: “We are investing £9bn in affordable homes,
including £2bn to help councils and housing associations build social
rent homes where they are most needed.
“All
of the affordable housing underspend from 2016-17, including £65m
returned by the Greater London Authority, has been made available to
spend on similar schemes.”
Last week, the National Audit Office estimated
that 10% of unitary authorities and county councils have less than
three years’ reserves left if they continue to deploy them at current
rates, leaving them vulnerable to potential insolvency.
The
Tory chair of the health and social care select committee, Sarah
Wollaston, said action was needed urgently: “NHS public health and
social care need a boost now, but also a long-term plan to provide the
funding they need and a clear plan to set out how the money will be
raised.”
Labour will
counter Hammond’s claim that the public finances are on the mend by
calling for an emergency budget to address the funding crisis hitting
Tory- as well as Labour- and Lib Dem-run councils.
