From the TUC

Nick Clegg confirms that Housing Benefit is to be used to pay for new homes

21 Oct 2010, by in Society & Welfare

Housing costs for low income families have seen some of the Government’s steepest welfare cuts, with the Budget aiming to save £1.7 billion from Housing Benefit (HB) by 2014/15 and another £400 million cut in the CSR (as a result of the benefit cap and the increase in the age limit for the shared room rate). But tonight Nick Clegg has confirmed what many have already pointed out – that the CSR’s decision to allow social landlords to increase rents to close to market rates will place a significant new (and apparently uncosted) pressure on the HB budget – the housing costs of social tenants who are on a low income (ie many of them).

In an interview with the Guardian the Deputy Prime Minister states that (my italics):

“Registered social landlords tell us that what would be the greatest catalyst for them to build homes is to allow rents for new tenants to drift up to something like 80% of market rents. They say that would give them the guaranteed revenue stream in order to invest to build new homes. People on low pay on those new rents will be compensated in full through housing benefit.

So, 150,000 new homes will be built over the spending review period, funded by ‘modest capital investment’ and the Housing Benefit budget. Either HB costs are going up (as the rents of social tenants are met through HB, or as social tenants on low incomes who can’t afford new rents are forced into private rented accommodation with HB covering their housing costs) or the number of new homes is going down.