Budget cuts could add 350,000 people to housing waiting lists, experts warn

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Thousands of mostly young families hoping that a housing association will provide them with a place to live are the likely casualties of the spending cuts set out in this week's Budget, along with the construction workers who could be building the homes they need.

The National Housing Federation has warned that more than 200,000 jobs in the construction industry could be lost or not created, and 350,000 people added to housing waiting lists, over the next three to four years.

The prediction is based on a calculation by the respected Institute of Fiscal Studies, who have said that if Chancellor George Osborne is going to achieve the sort of cuts in overall public spending that he is aiming at while preserving the NHS and overseas aid budgets, spending by other departments will have to be cut by about a third over three years.

The Federation, which represents England's housing associations, reckons that a cut in the housing budget of that magnitude would reduce the number of cheap homes built between 2011 and 2020 from 426,000 to 285,000. That would add to the 4.5 million people already on council waiting lists, an all time high.

On top of the budget cuts, the supply of so called "affordable housing" is under threat from changes to planning laws. The Government has already given councils greater powers to prevent developers building on gardens.

There are also fears that the Government is also going to scrap what are called Section 106 agreements, under which developers are granted planning permissions to build new homes only if they include a specified number of "affordable" homes on the site. About 40 per cent of all new "affordable" homes are built under these agreements.

David Orr, chief executive of the National Housing Federation, said: "If we don't safeguard the building of affordable homes then hundreds of thousands of vulnerable people will needlessly be added to waiting lists and more than 200,000 jobs could be lost or not created.

"Drastically cutting the housing budget could also imperil the fragile recovery, as our modelling shows that cuts to the housing budget of one third would automatically take £44bn out of the economy over the next 10 years."