黑洞社区

Prime minister David Cameron has today launched an attack on housing associations, saying they were inefficient and that it was 鈥渁bout time鈥� they upped their game.

Cameron made the comments, which have already prompted an angry response from the sector鈥檚 trade association, following questioning from new Labour leader Jeremy Corbyn at Prime Minister鈥檚 Questions in the House of Commons.

Defending chancellor George Osborne鈥檚 decision to cut the rents housing associations can charge by 1% a year for four years, Cameron said: 鈥淚t鈥檚 vital we reform housing associations and make sure they are more efficient. Frankly they鈥檙e part of the public sector that haven鈥檛 been through efficiencies, and haven鈥檛 improved their performance and I think it鈥檚 about time that they did.鈥�

Housing associations, which built 50,000 homes in 2014, are not actually classified as public sector bodies, despite receiving grant from government, with many set up as charities. The organisations add private sector borrowing against their existing homes and profit from private development to government funding in order to pay for the construction of new affordable homes.

Many have claimed that the planned introduction of the Right to Buy to housing associations and the rent reductions will undermine their ability to raise private finance to pay for new homes. The National Housing Federation (NHF) says the decision to reduce rents will result in 27,000 fewer homes being built.

Ruth Davison, director of policy and external affairs at the NHF, said associations were already becoming 鈥渆ver more鈥� efficient. 鈥淗ousing associations are emphatically not part of the public sector 鈥� they are the most successful partnership between state and private enterprise in the UK鈥檚 history, having brought 拢76bn in private investment to the table over the past 30 years,鈥� she said.

鈥淓ight years ago [housing associations] matched every 拢1 of public investment with a further 拢2 of private finance, today this figure has risen to 拢6 of private investment for every 拢1 of public money, and they are committed to doing more.鈥�

If housing associations were forced to become part of the public sector, then the 拢60bn of borrowing by associations would become classified as public sector debt.

Cameron鈥檚 remarks follow a less strongly-worded challenge to housing association by chancellor George Osborne during a select committee hearing last week.

Cameron鈥檚 comments came after Jeremy Corbyn used the first two questions of his inaugural Prime Minister鈥檚 Questions to challenge Cameron on the housing crisis. Corbyn said: 鈥淭he decision made to cut rents by 1% in councils and in housing associations without thinking about the funding issues that those authorities face is a serious one.鈥�

Corbyn quoted a question sent in by a member of the public, named Stephen, who said that  150 jobs would be cut at the housing association he worked for because of the planned cut in rent levels.

Cameron said previously rising rents had caused a 鈥渕erry-go-round鈥� in which rising rents led to higher housing benefit payments, which in turn led to higher taxation.