It said the fact that the department had failed to properly assess what other options were available to boost house building went against the Treasury's good practice guidelines.
In a report on Help to Buy 1 published this morning, the Public Accounts Committee also says the equity loan part of the scheme poses a “medium and long term risk” to the taxpayer, and that DCLG will only be able to prove its value for money following a comprehensive evaluation.
PAC chair and Labour MP Margaret Hodge says:
“The scheme creates a medium and long-term risk to the Department by building a £10bn portfolio of equity loans that will require careful management. Managing such a portfolio is new territory for both the Department and the Homes and Communities Agency, and the ongoing monitoring required will create a heavy administrative burden for both organisations, potentially over decades.
“There are also more immediate risks, particularly the fact that some buyers have accessed the scheme with deposits of less than 5 per cent, which increases taxpayers’ exposure to risk.
“The Department must be mindful of these risks – and it must demonstrate the scheme is value for money to the taxpayer.”
Housing Minister Kris Hopkins said:
"The Help to Buy: equity loan scheme is helping build more homes and support the economy - in fact we estimate the wider economic benefits of the scheme could be as much as £1.9 billion. So it is offering excellent value for money for taxpayers’, and to suggest otherwise is simply absurd.
"Since the scheme’s launch, housebuilding is up a third and now at its highest level since 2007. Over 27,000 people across the country have used Help to Buy to get on the property ladder with a fraction of the deposit they would normally require, with cities including Leeds, Durham and Manchester seeing some of the biggest numbers of sales."
