Help to Buy 'creates taxpayer risks'
A group of MPs has warned that the government's Help to Buy programme creates risks for the taxpayer.The Public Accounts Committee (PAC) has published a report into the initiative and questions whether it will deliver value for money.According to the PAC, the Department for Communities and Local Government (DCLG) does not understand the overall impact of the scheme and the combined effectiveness of its separate initiatives.No assessment was carried out to determine whether there were more effective options before proceeding with the scheme, the PAC said, which violates Treasury guidelines. Help to Buy was established quickly and nearly 13,000 homes were purchased with its support in the first nine months.As a result, £10 billion has been committed without establishing whether it is the best use of taxpayers' money."The DCLG will not carry out a comprehensive evaluation of the scheme until 2015, by which time billions of pounds will already have been spent," said PAC chair Margaret Hodge.The initiative creates a "medium to long-term risk" to the department due to the management of the £10 billion loan portfolio. This will result in a potentially decades-long administrative burden for the DCLG and Homes and Communities Agency (HCA) - one with which both departments are unfamiliar."There are also more immediate risks, particularly the fact that some buyers have accessed the scheme with deposits of less than five per cent, which increases taxpayers' exposure to risk," Ms Hodge continued.The PAC recommends the DCLG maintain a downward pressure on the scheme's costs and fully utilise skills developed through running the programme when implementing similar initiatives in the future.It also states that the DCLG should carry out a thorough evaluation of the alternatives when launching future initiatives, in line with Treasury guidelines.Moreover, both the DCLG and the HCA must demonstrate how they will protect the taxpayer and are able to manage the loan portfolios effectively. They also need to show how they will maximise repayment and respond to changing commercial circumstances.
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