A director of one of London largest housing associations has warned that house building and provision of new properties has been scaled down due to fears about the upcoming changes to the benefits system.
Speaking before the Public Accounts Committee today, Mike Donaldson, a director of social housing provider L&Q, warned of a double whammy with evictions and arrears set to rise under the new regime. The impact of this will be that housing associations will be unable to spend cash building new homes meaning a toxic combination of fewer homes and more homeless people.
Such are his organisation’s fears of the oncoming debt tsunami that Donaldson claimed they had already cut the number of new properties provided over the last year from 1000 to 920, a fall of 8%.
Benefits are to be paid monthly under the new system and payments will go direct to tenants, leading to fears that some of those on the lowest income may find managing money difficult and fall into arrears. On top of this a ‘bedroom tax’ will mean claimants having money docked from benefits, leaving them with either a weekly shortfall or forced to move.
Donaldson’s shocking admission comes on the day that information from pilot schemes to test the new payment system was announced by the DWP. The figures suggest that rent arrears have doubled in the pilot areas, even though many of the most vulnerable tenants have not been included in the pilots. No tests of the new system had taken place for tenants in the private sector, where around 30% of claimants have rent payments sent direct to their landlords.
With homelessness already soaring it seems that everyday this Government does something to make the problem worse. The cardboard cities which emerged in London under the last Tory government may yet become a feature of every major city in the UK.
You can watch the meeting of the Public Affairs Committee, which also includes questions on the Work Programme (haven’t watched it yet so don’t know what was said) at: http://www.parliamentlive.tv/main/Player.aspx?meetingId=12123