The Federation also warned cuts of 17.98% over the next 10 years would also lead to 278,000 jobs and apprenticeships in the construction industry, and the wider economy, either being lost or not created.
Given the dire consequences big cuts in spending would have on house building numbers, and job losses, housing should be viewed in the same "untouchable" terms as health, education and policing by all the political parties, and be protected from cuts, the Federation said.
In July 2007, in an attempt to tackle Britain’s chronic housing shortage, the Government pledged to build three million homes by 2020, a million of which would be affordable.
It is expected that 162,000 of the targeted affordable homes will have been built by April 2011.
However, according to the Institute for Fiscal Studies, figures in the Pre-Budget Report imply the Government will have to cut budgets from all departments by an average of 17.98% in real terms – to slash the nation’s budget deficit while protecting spending on health, policing and schools.
If cuts of this order were implemented to the housing budget up to 2020 it would mean that only 444,000 of the targeted one million affordable homes would be built – leaving a shortfall of 556,000.
Under cuts of 17.98%, the affordable house building sector would suffer a devastating double blow through the budget cuts themselves, and the loss of billions of pounds of worth of extra public investment over the coming decade that was anticipated by the Government when it set out its 2020 housing targets.
If the reduced rate of building, that would occur under cuts of 17.98%, was continued into the long term, it would take the Government until 2038 to build the envisaged one million affordable homes – 18 years later than expected.
Federation chief executive David Orr said: "A swingeing cut of 17.98% to the budget for new affordable homes would deepen the national housing crisis and lead to the loss of thousands of jobs and apprenticeships.
"Reducing the number of new homes by such a huge degree would kill off the dreams of more than a million people in desperate need of decent, affordable housing – leaving many to live in cramped, unsuitable conditions for a generation.
"Axing the new homes budget would also increase unemployment and obliterate the national programme for creating apprenticeships – as housing is one of the nation’s key generators of jobs and prosperity.
"As bad housing is closely linked to poor health, poor educational attainment and higher crime rates, ministers should give funding for the house building programme the same untouchable status as health, education and policing – and protect it from the coming savage cuts."
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