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GMB Welcome Tackling Corporate Welfare

Thursday, June 6, 2013

GMB Welcome Labour’s Commitment To Tackle “Corporate Welfare” In Housing And Low Pay Companies

Ed Miliband’s commitment to tackle the affordable homes crisis will be welcomed and applauded as the first positive step in dealing with the housing benefit scandal says GMB

GMB welcomed the commitment by Ed Miliband, in his speech today, to tackle amount of taxpayers cash used to subsidise private landlords and low paying employers via housing benefits and working families tax credits.

Paul Kenny, GMB General Secretary, said “Ed Miliband’s commitment to tackle the affordable homes crisis will be welcomed and applauded as the first positive step in dealing with the housing benefit scandal. See GMB press release on housing benefit at GMB Congress on June 3rd.

Also his commitment to tackle low pay, so that taxpayers' aren't left picking up a growing bill, such as companies paying the living wage, stopping abuse of zero hours contacts, preventing exploitation of temporary workers and outlawing recruitment only from abroad, are exactly the type of policies that will win working people back to Labour.”

End

Contact Kamaljeet Jandu 07956 237 178 or Gary Doolan 07852 182 358 or Lisa Johnson 07900 392 228

Notes to editors

GMB press release on housing at GMB Congress on 3rd June 2013.

OVER 80,000 NEW HOMES COULD BE BUILT EACH YEAR IN GREAT BRITAIN FOR HALF MONEY GOING ON HOUSING BENEFIT GMB CONGRESS TOLD

Much of the £411billions of taxpayer’s funds spent on housing benefit in last 30 years has been funnelled to private landlords and this “corporate” welfare should end says GMB

More than 80,000 new homes could be built in Great Britain each year if just half the total of £22,812m that was spent on housing benefit in 2011/12 in the region is spent instead on investment in new social housing GMB Congress in Plymouth was told today.

Congress called for a fundamental break in housing policy and for the billions spent subsidising private landlords to be switched to building new houses to let at affordable rents.

On the same basis in London a total of 15,544 new homes could be built each year if half the total of £5,884m that was spent on housing benefit in London is spent instead on investment in new social housing. In the North West, on the same basis, the number for new homes is 11,128, in the South East 8,669 new homes, in Scotland 8,432 new homes, in the West Midlands 7,757 new homes, in Yorkshire & The Humber 7,249 new homes, in the South West 6,229 new homes, in The East of England 5,605 new homes, in the East Midlands 5,008 new homes and in the North East 4,466 new homes.

The total new homes that could be built for half of the money spent on housing benefit in England and Scotland is 80,083. In Wales GMB estimates that around 4,000 new homes could be built for the £955,8m spent on housing benefit.

The table below shows how much was spent in each region in 2011/12 on housing benefit and sets out possible number of new homes if half that was invested instead in social housing. For English regions the figures used for total scheme cost for each new dwelling range from £111,014 to £155, 465 and come from The Homes and Communities Agency (HCA). The figure used for total scheme cost for each new dwelling is £189,276 in London and is from the GLA. For Scotland the figure used for total scheme cost for each new dwelling is £102,448 which is the urban average cost per unit and is from a document called Innovating Housing Delivery from Homes For Scotland, page 16. Total scheme costs include the construction and land costs associated with the development of a home. See notes to editors for sources and definitions.

In 2011/12 a total of £23 billion was spent on Housing benefit in England, Wales and Scotland to help meet housing costs for rented accommodation. A total of £411 billion at current prices has been spent on housing benefit since it was introduced by the Tory Government in 1982.

These figures on housing benefit and possible new homes are in a new report published today, 3rd June, at the GMB Congress in Plymouth which started on 2nd June.

GMB Congress comprises 500 lay GMB member delegates is in Plymouth till Thursday 6th June. Delegates are members who have been elected to represent over 620,000 members from every part of the UK and Ireland. They are employed in every sector of the economy.

REGION BY AREA: HOUSING BENEFIT SPENDING 2011/12 AND POTENTIAL NUMBER OF NEW HOMES

 

 

2011/12

Number of homes built if half of the Housing Benefit expenditure used to build new homes

 

 

 

 

 

Great Britain

£22,813,582,263

 

 

England and Scotland

 

80,083

 

 

 

 

 

 

 

 

rank

 

 

 

1

London

£5,884,051,755

15,544

2

North West

£2,539,895,959

11,128

3

South East

£2,695,458,395

8,669

4

Scotland

£1,727,744,979

8,432

5

West Midlands

£1,850,350,864

7,757

6

Yorkshire and The Humber

£1,608,689,235

7,245

7

South West

£1,622,554,384

6,229

8

East

£1,742,714,014

5,605

9

East Midlands

£1,194,651,058

5,008

10

North East

£991,615,699

4,466

 

Wales

£955,855,921

Estimated 4,000

Paul Kenny, GMB General Secretary, said “Half the cash spent in Britain on housing benefit last year would fund over 80,000 new homes each year across the country.

Housing benefits to meet housing costs for rented accommodation for those on low incomes is a Thatcher Tory policy. The cost has ballooned to £23billion per year.

Over the past 30 years a huge slice of the £411billions of taxpayer’s funds spent on this Tory policy has been funnelled to private landlords as “corporate” welfare.

Labour’s traditional and more cost effective policy of building good quality houses to let at affordable rent for those on low incomes was ditched. Much of the stock of social housing that was sold off is now in the hands of “buy to rent” private landlords.

In Wandsworth for example there are 977 private landlords who own more than one of the 6,180 ex council leasehold homes sold under the “right to buy” which are now owned by “buy to let” landlords. One private landlord owns 93, another owns 32, another 15 landlords each own 10 or more and a further 83 landlords each own between 5 and 9 of these dwellings. Many of their tenants are in receipt of housing benefit rather than being charged affordable rents.

Public funds should be switched to investment in social housing and away from this failed expensive Tory policy of corporate welfare and private greed.

GMB Congress wants a Labour Party election manifesto insisting that councils build new homes to let at affordable rents all across the region.

Ending corporate welfare will save taxpayer’s money and will kick start the local economy. It will provide families with better quality houses with more security of tenure.”

End

Contact Kamaljeet Jandu, GMB National Equality & Inclusion Officer on 07956 237178 or Gary Doolan 07852 182 358 or Lisa Johnson 07900 392 228 or GMB Press Office: 07921 289880 or 07974 251823.

Notes to Editors

1 Cost of developing new dwellings: from The Homes and Communities Agency (HCA) English Regions

HCA Operating Area

Total scheme costs (TSC)

Homes

Total scheme cost per home

East and South East

£2,580,566,107

16,599

£155,465

Midlands

£1,893,987,580

15,880

£119,269

North East, Y & H

£996,794,445

8,979

£111,014

North West

£1,121,510,274

9,827

£114,125

South and South West

£1,978,196,826

15,189

£130,239

TOTAL

£8,571,055,232

66,474

£128,938

 

Total scheme costs include the construction and land costs associated with the development of a home

2 Average Cost of Affordable Housing Unit in London – Q and A in Greater London Assembly

January 30th, 2013

What is the average build cost for an affordable housing unit in London funded through the 2011/15 funding programme controlled by the Mayor, broken down by number of bedrooms per unit?

Written response from the Mayor

The current average build cost for an affordable housing unit in London funded through the 2011/15 funding programme is £189,276. This is based on total acquisition, on costs and works costs for schemes that are currently identified for delivery to 2015. A breakdown by number of bedrooms is not available from the information collected by the GLA.

3 New housing costs in Scotland

The figure used for total scheme cost for each new dwelling is £102,448. This is the urban average cost per unit and is from a document called Innovating Housing Delivery from Homes For Scotland, page 16

Homes for Scotland HFS Innovating Scotland

4 Housing Benefit is a means tested benefit that is intended to help meet housing costs for rented accommodation. It is paid for by central government is operated by local councils since 1982 when its introduction coincided with deregulation of the private sector rental market and the mass sale of social housing. The Housing Benefit Expenditure shown in the table above is from DWP Statistical and Accounting Data.

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