Affordable Housing 'Benefit Trap' Warning

The Government's own affordable housing programme risks trapping some of its poorest tenants into a "benefit trap", MPs have warned.

The scheme will make £1.8bn of grants to housing associations to build 80,000 new homes by March 2015.

But while they will receive less money for building the homes - £20,000 per home on average, and a third of the value of those provided under a previous scheme - they will be able to put up the rents.

As a result, the housing benefit bill is expected to rise by £1.4bn over 30 years.

The Commons Public Accounts Committee said it was also "not yet clear" whether the Affordable Homes Programme would save money in the long term.

It warned that some people would not be able to rent the properties altogether, while others would end up claiming more on housing benefits.

Some would also struggle to find a job well-paid enough to cover the housing costs to make "working worthwhile", it said, defeating the Government's own objective to reduce people's dependency on benefits and "make work pay".

"The programme therefore shifts cost from one department to another," the committee said in a report.

Margaret Hodge, the Labour MP who chairs the committee, said the panel had "serious concerns" about the financing of the programme and the affordability of its homes for tenants.

"The Department must do more to understand the full impact of higher rent levels on tenants and ensure that resources are targeted where need is most acute," she added.