The 2020 Group has urged the government to try to build its way out of the recession by launching a major programme of house construction.

The Group has recently been formed, and consists of building bodies, councils and unions. The group claims that we need to build 100,000 new affordable homes to rent over the next couple of years.

It says that an “urgent” demand will be met if new housing is created, and the plan will also help to maintain the construction industry jobs.

The government however, says it has already set plans in motion to create an extra 12,500 new homes in the next two years.  It claims it will spend £550 million to build 7,500 new properties, on top of £160 million buying nearly 5,000 unsold homes.

This is said to be a part of a long-term programme which will cost the government £8 billion and deliver more affordable housing in both buying and renting situations.

The recession has caused a collapse in the housing market – housing prices, lending construction etc.  The rise in repossessions is also putting pressure on councils, and the number of people on the waiting list for houses is set to reach five million by the end of 2010.

The 2020 Group has also estimated that 450,000 people in the construction industry will lose their jobs between 2008 and 2010. However, it claims that many struggling construction sites have already been identified, within months a government cash injection should be given to help them start building again.

‘Urgently Needed’?

2020 Group’s chairwoman, Kate Barker has said that house building offers “excellent value in terms of sustaining economic activity”, and is “urgently needed”.

The government says it is “committed to major increases in the supply of affordable and social housing to meet the needs of families on waiting lists.”

David Orr, chief executive of the National Housing Federation, said that a mass house-building programme “could kick-start the economy, save jobs, and deliver new homes for more than 200,000 people.

This is a one-off chance for the government to stimulate the economy and help meet housing need in one fell swoop.”

The 2020 Group has several recommendations it makes go the government about a housing programme including:

• The plan could save 30,000 jobs in the industry as well as thousands in related industries
• Prevent the loss of key skills by preserving construction jobs and apprenticeships
• Let builders continue to invest in the housing supply and reduce the risk of a shortage once the economy recovers.

The group is also suggesting that, overall, the government could profit from the investments due to the increase of jobs leading to an increase in revenue from tax.

The Trades Union Congress’ General Secretary said: “when such investment can ensure such important sectors as construction retain jobs, capacity and its skills base, the case for a significant boost in the budget becomes overwhelming.”

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