Jim Pickard Will the spending review mean the axeing of 270,000 new affordable homes?

The National Housing Federation – which represents housing associations – will warn today that plans to build 270,000 affordable homes for low income families over the next decade could be axed as a result of the spending review.

The campaign group doesn’t know what’s in the CSR but is estimating that funding for new developments will be cut by up to 50 per cent; which is probably not far off the mark by my estimate. (The DCLG will slash spending on property grants; it’s also rumoured to be cutting its own staff by 40 per cent).

The National Housing Federation claims it has heard that housing is likely to be one of the biggest losers out Wednesday’s CSR – with the danger of building grinding almost to a halt.

It points out that waiting lists are already at record levels with 4.5 million people currently waiting for a social home in England. At the same time the total number of homes being built has slumped to its lowest level since the Second World War with just 113,000 built in 2009/10.

A 50 per cent cut to the affordable housebuilding budget would mean the budget between 2011/12-2019/20 would be reduced from £28.6bn to £10.5bn – a fall of £18.1bn assuming spending only rises by inflation at the end of the spending review period .

On this basis the NHF argues that:

· Around 270,000 affordable homes would not be built up to 2020 (the total would fall from 426,000 to 157,000, a drop of 36,700 a year for nine years).
· 674,000 more people would be left in housing need
· Around 283,000 jobs in the construction industry would be axed or not created by 2020
· And the wider economy would also suffer, with the cuts reducing economic activity by around £58bn over the next nine years.

The federation is warning that the poorest communities would be hardest hit. “The government said it was committed to social housing and to protecting the most vulnerable,” says David Orr, chief executive of the group. “This can only be interpreted as a blatant betrayal of those promises and a kick in the teeth to millions of people stuck on waiting lists.”