Government’s ‘laughable’ £36,000 handout ‘won’t do anything’ to fix housing crisis

MP Meg Hillier pictured last year at a protest by renters group Digs Photograph: Digs

A £36,740 handout from the government to help Hackney Council alleviate the housing crisis has been branded derisory by a local MP who says it “won’t do anything” to fix the chronic problem.

Meg Hillier, the Labour MP for Hackney South and Shoreditch, said the sum was “laughable” after Housing Minister Gavin Barwell wrote to inform her that the cash was intended to “support communities to deliver affordable units of mixed tenure”.

The sum is only around six per cent of the average house price in Hackney. It comes from the Community Housing Fund, a £60 million per year pot of money raised via higher rates of stamp duty tax on second homes.

Local authorities in the south west of England share around £20 million of this money each year.

Barwell wrote to Hillier: “You will be pleased to know we have allocated funding to one or more local authorities in your constituency….

“We would welcome your support in making sure the local authority and delivery partners in your constituency identify suitable outlets for this funding so as to boost delivery of community-led housing.

“We will make payments in two tranches to increase deliverability.”

The amount was decided on via a formula which ranked local authorities by the concentration of second homes in their area as well as “issues of housing unaffordability”.

Hillier said: “Average prices in the borough are well over half a million pounds, rent is soaring, with overcrowding and demand for social housing the highest seen in 20 years.

“What is the Minister’s response? To allocate Hackney £36,740. This is a laughable amount. In contribution to Hackney’s housing problems, this won’t do anything.”

Her comments came as Mayor Philip Glanville called for councils to be handed more power to build affordable homes, saying provision by housing associations and the private sector was no match for the rate at which local authorities had built in the past (they had the “ambition” to do so again in the future, he declared).

Hackney has more families living in homeless hostels than anywhere else in London, the Hackney Gazette reported.

The Department for Communities and Local Government has said it accepts that people buying second homes are partly responsible for crowding out first time buyers.