Sadiq Khan today attacked the Government for its ‘abject failure’ to tackle London’s housing crisis, as it was exposed that a major new £2billion Government housing fund, announced by the Prime Minister in her Conservative party conference speech and confirmed by the Chancellor in the Budget yesterday, is not new money.
The £2billion is, in fact, money diverted from existing housing funding ‘pots’.
Theresa May pledged to invest £2billion to build new affordable housing as the centrepiece of her Conservative Conference speech in Manchester in October, vowing to ‘take personal charge of getting government back into the business of building houses’.
The Mayor of London, Sadiq Khan, said:
“This is the most anti-London Budget in a generation, one which exposes the Government’s abject failure to tackle London’s housing crisis.
“They have failed to match their words with action – it turns out a key pledge from the Prime Minister on housing is just smoke and mirrors and not new money.”
The Chancellor confirmed the funding in the official Budget Red Book, which says: “The Budget confirms the further £2 billion of funding for affordable housing announced in October, including funding for social rented homes”.
However, analysis from the independent Office of Budget Responsibility (OBR) shows that, far from being new money, the £2 billion is actually just a reallocation of previously announced but unspent housing funds – taken from the Accelerated Construction Fund and the Starter Homes Land Fund.
The OBR report says: “The £2 billion of spending announced by the Prime Minister in October has been financed by reducing spending on ‘accelerated construction’ and ‘starter homes’ across the four years from 2017-18 to 2020-21.”