New Research: Solve the Second Homes Crisis: House MPs in the Olympic Village

June 15, 2009 9:54 AM



  • Current plans are for the Olympic Village to leave behind a legacy of 3,000 new homes.



  • The Olympic Village project has failed to attract the private financing expected and as a result, the project has been nationalised.  That means there would not need to be any significant new capital expenditure in order to house MPs in the Olympic Village.



  • The Additional Costs Allowance, which cost taxpayers over £11.5 million in 2007-08 and damaged the reputation of Parliament could largely be abolished.



  • This scheme has been adopted in Sweden, where the Parliament owns around 250 apartments for its representatives.



Recent weeks have seen growing public outrage over MPs expenses and allowances system. Too many MPs are using the parliamentary allowances system to pay off their mortgage, causing resentment in taxpayers around the country and a black hole in the public purse. One solution is to provide government owned accommodation for those MPs whose constituencies are outside commuter range. 


That would prevent a recurrence of scandals when MPs make profits from selling homes financed with taxpayers’ money.  The TaxPayers' Alliance can today reveal figures showing that housing MPs in the Olympic Village would provide a solution that is both cost effective and, equally as important, would prevent future abuse of the taxpayer funded allowances system, helping MPs to rebuild public trust in Parliament.
 
The full report can be downloaded here (PDF).
 
Key Findings




  • Current plans are for the Olympic Village to leave behind a legacy of 3,000 new homes.



  • The Olympic Village project has failed to attract the private financing expected and as a result, the project has been nationalised.  There would not need to be any significant new capital expenditure in order to house MPs in the Olympic Village.



  • The only outside financing for the project comes from the social landlords Triathlon Homes, who are expected to pay £268 million for 1,400 affordable homes.



  • That provides a market value for obtaining homes in the Olympic Village of roughly £191,500 per home, a similar bill per home would mean that obtaining permanent homes for use by all 572 MPs outside London would cost £110 million in foregone earnings from selling the homes to private or social developers.



  • This would be offset by an increase in the value of the remaining, roughly 1,000, homes in the Olympic Village.  Those homes would likely see a significant increase in price, which would increase the value returned to the taxpayer when they were eventually sold. 



  • This scheme has been adopted in Sweden, amongst others, where the Parliament owns around 250 apartments for its representatives.



  • The Additional Costs Allowance cost over £11.5 million in 2007-08 and could largely be abolished, though significant payments would still need to be made for expenses associated with maintaining a second home such as council tax and utilities bills. 



  • Within a decade – the span of two parliaments – it would be reasonable to expect that savings under this scheme would recoup any costs associated with not selling the homes.



  • As the Olympics forms a major terrorist target the Olympic Village will already need to be built with security in mind.  Housing MPs in a single location will make it easier to arrange a variety of services. 



 Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:



“We have been paying for MPs’ to build their property empires for too long. It is clearly necessary to consider radical proposals to ensure that we don’t continue haemorrhaging taxpayers’ cash every year.  Money is tight, so taxpayers won’t want to see large amounts spent buying second homes for MPs when they are struggling to pay their own mortgages.  Using the Olympic Village after the Games are over, which is already being built at the taxpayers’ expense, would offer an affordable and sustainable way forward and aid the regeneration of the East End.”



  • Current plans are for the Olympic Village to leave behind a legacy of 3,000 new homes.



  • The Olympic Village project has failed to attract the private financing expected and as a result, the project has been nationalised.  That means there would not need to be any significant new capital expenditure in order to house MPs in the Olympic Village.



  • The Additional Costs Allowance, which cost taxpayers over £11.5 million in 2007-08 and damaged the reputation of Parliament could largely be abolished.



  • This scheme has been adopted in Sweden, where the Parliament owns around 250 apartments for its representatives.



Recent weeks have seen growing public outrage over MPs expenses and allowances system. Too many MPs are using the parliamentary allowances system to pay off their mortgage, causing resentment in taxpayers around the country and a black hole in the public purse. One solution is to provide government owned accommodation for those MPs whose constituencies are outside commuter range. 


That would prevent a recurrence of scandals when MPs make profits from selling homes financed with taxpayers’ money.  The TaxPayers' Alliance can today reveal figures showing that housing MPs in the Olympic Village would provide a solution that is both cost effective and, equally as important, would prevent future abuse of the taxpayer funded allowances system, helping MPs to rebuild public trust in Parliament.
 
The full report can be downloaded here (PDF).
 
Key Findings




  • Current plans are for the Olympic Village to leave behind a legacy of 3,000 new homes.



  • The Olympic Village project has failed to attract the private financing expected and as a result, the project has been nationalised.  There would not need to be any significant new capital expenditure in order to house MPs in the Olympic Village.



  • The only outside financing for the project comes from the social landlords Triathlon Homes, who are expected to pay £268 million for 1,400 affordable homes.



  • That provides a market value for obtaining homes in the Olympic Village of roughly £191,500 per home, a similar bill per home would mean that obtaining permanent homes for use by all 572 MPs outside London would cost £110 million in foregone earnings from selling the homes to private or social developers.



  • This would be offset by an increase in the value of the remaining, roughly 1,000, homes in the Olympic Village.  Those homes would likely see a significant increase in price, which would increase the value returned to the taxpayer when they were eventually sold. 



  • This scheme has been adopted in Sweden, amongst others, where the Parliament owns around 250 apartments for its representatives.



  • The Additional Costs Allowance cost over £11.5 million in 2007-08 and could largely be abolished, though significant payments would still need to be made for expenses associated with maintaining a second home such as council tax and utilities bills. 



  • Within a decade – the span of two parliaments – it would be reasonable to expect that savings under this scheme would recoup any costs associated with not selling the homes.



  • As the Olympics forms a major terrorist target the Olympic Village will already need to be built with security in mind.  Housing MPs in a single location will make it easier to arrange a variety of services. 



 Matthew Elliott, Chief Executive of the TaxPayers’ Alliance, said:



“We have been paying for MPs’ to build their property empires for too long. It is clearly necessary to consider radical proposals to ensure that we don’t continue haemorrhaging taxpayers’ cash every year.  Money is tight, so taxpayers won’t want to see large amounts spent buying second homes for MPs when they are struggling to pay their own mortgages.  Using the Olympic Village after the Games are over, which is already being built at the taxpayers’ expense, would offer an affordable and sustainable way forward and aid the regeneration of the East End.”

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