Spending review places housing choices at local authority doors

If there is one overwhelming conclusion to be drawn from last week's spending review, it is that ministers and their advisers know the price of everything and the value of nothing.

The review might have been comprehensive, but it sure as hell has not been strategic. Many of the intended efficiencies are just promises and are not likely to be "savings" but sackings.

The country faces months, if not years, of struggling with unintended consequences. Whichever sector provides them, public services are interwoven. Start pulling the thread of one and another begins to unravel. That's why some estimates put job losses in the private sector at roughly equal the 500,000 expected across the public sector.

But the worst example is in housing policy, where industry bewilderment is almost palpable.

Ministers want new social housing tenants to pay 80 per cent of market rents to fund 150,000 affordable homes. But it is highly debatable whether much of this money will be collected, given the numbers already on housing benefit.

At the very least, this will hit welfare hard and act as a disincentive to work. London boroughs are block-booking bed-and-breakfast accommodation outside the capital for the 200,000 people they expect to be forced out of inner city areas. This is not exactly a vote of confidence.

How the figures are to be met with local government capital expenditure falling 74 per cent is anyone's guess. Removing ring-fencing is a masterstroke that would have made Machiavelli proud.

Local authorities of all political shades will get the grief while ministers wash their hands and plead localism at work. No wonder communities secretary Eric Pickles, who cut deeper than any other minister, settled with the Treasury early.

Planning will be fighting for survival against other vital services. At the same time, there are serious doubts about whether professionals will have the resources or training to prepare for the new localism agenda - or even if they will have the jobs. The prospect of pressure groups running the planning system is turning into a real one.

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