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The new Communities and Housing Secretary said vulnerable families were living in conditions which were “overcrowded” and “poor” because of the demand for social homes.
At a Conservative Party conference fringe event in Manchester, Mr Gove said: “The supply of social housing overall has not kept pace with the demand and also the quality of social housing, particularly in some parts of the country, remains scandalously poor.
“There are people who are living in conditions which are overcrowded, there are people living in conditions afflicted by damp and other factors which hold back the flourishing of the children and the families who are raised in those homes.”
Government figures show there was more than 1.15 million households on social housing waiting lists in England at the end of last year.
The crisis is particularly bad in the capital, with Londoners facing waits of more than 10 years to get a council house in some boroughs and Newham, Lambeth and Tower Hamlets all having more than 20,000 households on waiting lists.
The condition of London’s social housing has also hit headlines in recent months. Earlier this year, Croydon council vowed to undertake a review of high rise council buildings after experts dubbed one of its blocks the “worst housing conditions they had ever seen”.
Residents of the 11-storey residential tower block in Regina Road, South Norwood have repeatedly spoken out about leaks in their flats, which made their homes dangerous.
Lambeth council also began legal proceedings against three housing associations after residents in at least 23 blocks in the borough reported widespread damp and mould in their flats.
Mr Gove faces a challenge to persuade Tory MPs to support reforms to the planning system to help build the 300,000 new homes a year the Government is targeting by the mid-2020s.
At the event, organised by the Demos think tank, he said: “Resolving the housing problem, however it is defined, is a way both of making sure that people have a stake in the future and that families can grow in a holistic way, and it’s fundamentally about social justice as well.”
He added that “access to finance” needed to be improved to help get people on the housing ladder.
“It is also the case that we do need to look at the condition of social housing and the way in which we can make sure that there is proper incentivisation for those who are social housing providers both to improve stock and to increase numbers,” he said.
“It is also, critically, the case that you won’t unlock supply of any kind unless you work with those who are the developers, the builders and the generators of that new stock.”