Wanted: more new homes.

Government cuts threaten newbuild

Published:  27 January, 2010

LONDON: More than half a million affordable homes could be axed from the Government's building plans if earmarked public spending cuts are implemented, a campaign group warned today.

The National Housing Federation said figures set out in the Pre-Budget Report imply spending cuts to the housing budget of 17.98%, which if implemented over the next decade, would slash the planned number of new affordable homes by 556 000.

The Federation also warned cuts of 17.98% over the next 10 years would lead to a loss of 278 000 jobs and apprenticeships in the construction industry.

It is expected that 162 000 of the targeted affordable homes will have been built by April 2011.

The Institute for Fiscal Studies' figures imply that the Government will have to cut budgets from all departments by an average of 17.98%.

If cuts of this order were implemented to the housing budget up to 2020 it would mean that only 444 000 of the targeted 1m affordable homes would be built – leaving a shortfall of 556 000.

With cuts of 17.98%, the affordable housebuilding sector would suffer a loss of billions of pounds of worth of extra public investment over the decade. If the reduced rate of building continued into the long-term, it would take the Government until 2038 to build one million affordable homes.

Federation chief executive David Orr said: "Axing the new homes budget would increase unemployment and obliterate the national programme for creating apprenticeships because housing is one of the nation's key generators of jobs and prosperity."

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