Thursday, 26 May 2011

Labour's Mortgage Rescue Scheme declared an expensive failure

A couple of years ago when I was Chair of the Housing Scrutiny Panel in Reading I drew attention to the previous Labour government's Mortgage Rescue Scheme in a post entitled: 'The recession, housing and health in Reading today"
"As predicted we had a very interesting discussion on all things housing-related, spending a fair amount of time discussing how Reading is coping in the recession.

I was very impressed by the way officers in Reading Borough Council are coming up with policies and approaches that are really helping to support people in Reading. As one officer remarked 'we've never been here before' - is an element of trial and error involved but the fact that the Council is willing to be flexible to ensure people don't slip through the net was encouraging.
This pragmatic approach is quite different from some much-hyped government initiatives like the ill-fated Mortgage Rescue Scheme which it was revealed recently has only helped 6 families in the UK so far!'

Earlier this week the independent National Audit Office published a damning report claiming that this scheme helped less than half of people expected and went £35 million pounds over budget
"The Mortgage Rescue Scheme, launched in January 2009 by the Department for Communities and Local Government, in two years achieved fewer than half of the rescues expected.
The National Audit Office has reported that the Department directly helped 2,600 households avoid repossession and homelessness at a cost of in excess of £240 million - but it originally expected to help 6,000 households for £205 million.
The Department has spent on average £93,000 for each rescue completed – it expected to spend £34,000."

Preventing homelessness is vitally important.

Staff at Reading Borough Council work hard every day supporting families and individuals who find themselves in impossible housing positions.

But with less money around it is vital that taxpayers' money is spent wisely on organisations and schemes that deliver for residents.

I hope the present government learns from this expensive failure and works with councils to come up with a better system to support people faced with repossession.

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