I think that I have just provided the noble Baroness with some evidence to show that rents are not actually increasing in light of the changes that we have made. Rents are actually coming down. We are having some success in downward pressure on rents.
We have taken care to retain some flexibility to react if problems with affordability emerge along with the need to take action should significant divergences emerge between LHA rates and market rents. We have set aside £140 million over two years from 2014-15 to help people most affected by the new 1% limit. The noble Lord, Lord Best, referred specifically to effects in London, and I can confirm that the funding that has been set aside will be there to address areas precisely such as London and the south-east. Our intention is to increase the local housing allowance rates by more than 1% in areas where rent increases are causing a shortage of affordable accommodation. Rather than specifying the details in legislation now, however, we plan to develop our approach in spring this year before making final details available in the autumn so that we can reflect the views of key stakeholders and take account of the most up-to-date evidence before making decisions .
7.45 pm
My noble friend Lord Bates made the point that it is important to ensure that we reflect at all times that when we are talking about housing we are talking about people who are often very vulnerable; the fact that they are in this kind of housing means
that we should be very conscious of the effect of our decisions. I hope that I have been able to reassure him that the measures that we are taking very much address that kind of concern, but we are committed to making savings from this measure until 2015-16. Subsequently, a future Government have the opportunity to reconsider the policy design in view of the balance between local housing allowance rates and market rents.
The noble Baroness, Lady Hollis, and my noble friend Lord Bates spoke about increasing the supply of housing. I shall respond to a few points on that. First, the Government have committed £4.5 billion, along with £15 billion of private investment, to deliver 170,000 new affordable homes over this spending review period. Almost 58,000 affordable homes were delivered last year. That is one-third more than the average delivery in the 10 years between 2000-01 and 2009-10. Secondly, the Government will provide up to £10 billion in debt guarantees to support private investment in the private rented sector and in new affordable housing. Thirdly, in last year’s Autumn Statement the Government announced a new local infrastructure fund of up to £474 million to support key projects. This includes accelerating delivery of large housing sites and enabling quicker disposal of surplus public land for new homes.
In the wider context of the changes that we are making to housing benefit, my noble friend referred to direct payments and how the trial is going in terms of its impact on claimants. I would say two things in response to that. First, these are very early days for the trial and it is too soon to give a properly informed response to that question. However, there are certainly no immediate signs of any serious problem. It is worth reminding the Committee that this change is part of the wider reforms of the welfare system where we are trying not only to help people to prepare and, for those who are out of work, return to work but to help people to take control of their own finances. While I understand the risks that people point to in making that change, we should not ignore the importance of ensuring that we give people the opportunity to have control of their own budgets. This is an important initiative.
I hope that I have addressed the points raised by the noble Baroness, Lady Hollis, on Amendment 7, and the noble Lord, Lord Best, on his Amendment 12A, and have demonstrated to all noble Lords that our existing plans show that we are ensuring that there is proper monitoring and review of the arrangements we have introduced, and that it is not necessary to include these in the Bill.