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Devolve Housing Benefit to local councils say IPPR

Local councils have a duty to provide affordable housing, but should not dictate how landlords spend the money going to landlords through Housing Benefits, according to an IPPR report.

The research indicates that over the next four years the UK will spend £95 billion on Housing Benefit, and less than £5 billion on building new homes. By contrast, 80% of public spending in the 1970s was spent on new housing.

The IPPR believe that an increase in private rents is resulting in too much Housing Benefit going straight to private landlord with insufficient quid pro quo for the taxpayer or tenant.

Nick Pearce, IPPR Director, said: “Affordable house building has collapsed, homeownership rates are falling, homelessness applications are up and the Housing Benefit bill continues its inexorable growth. There is no shortage of bad news on housing, but dangerously little serious debate about the fundamental direction of housing policy.

They are now calling for a divide between capital grants and Housing Benefit spending to be collapsed through the devolution of expenditure to local authorities and placing them at the forefront.

Councils have a legal duty to use ‘Affordable Housing Grants’ to improve affordability in their area, including striking more favourable deals with private landlords and ‘investing to save’, their multi-year funding in affordable housing which would reduce benefit demand.

The IPPR has argued that decentralisation would result in a more revolutionary institutional reform than the Governments current localism policies, as councils would have to forge consensus for their spending plans and housing strategy, alongside the balance of local interests. They would also be accountable for progress in improving affordability.

They have now focussed on three major areas of radical reforms, including shifting from subsidising rents to build homes through decentralisation, spreading opportunities for sustainable homeownership by finding new finance sources to pay for homes, whilst also ensuring a better, more balanced offer for those who rent by increasing the security of families in the private rented sector.

Mr Pearce added: “Now is the time for a radical new direction, shifting from benefits to bricks and mortar and moving power down to the local level to tackle the housing crisis.”

This was posted in Bdaily's Members' News section by Ruth Mitchell .