Government plan to build 80,000 affordable homes at risk of falling short David Cameron and Nick Clegg visit a building site in Guildford last year to publicise the affordable housebuilding scheme. Photograph: Steve Parsons/PA Government plans to build up to 80,000 properties under the affordable homes programme are at risk of significant failures, according to a National Audit Office (NAO) report released on Wednesday. Nearly a fifth of contracts with housing providers are not yet signed; more than half the homes will not be delivered until 2015, the final year of the programme; and some providers are concerned they may not be able to charge rents at 80% of the market rate as originally agreed. Amyas Morse, the comptroller and auditor general, said the plans leave little room for manoeuvre. "There are key risks including the fact that more than half of the homes are planned for the final year, with no room for slippage," he said. The final judgment on the success of the programme will depend on how well these risks can be managed between now and 2015. In 2010, the Department for Communities and Local Government announced the affordable homes programme, expected to contribute 80,000 homes through affordable rent and affordable home ownership. Housing associations, local authorities and private companies set up by councils have set themselves up as "housing providers," according to the report. Unlike previous programmes, landlords will be able to charge up to 80% of market rates as rent while financing a greater proportion of the cost of new homes themselves through increased borrowing. The programme increases the risks that providers must manage, including increased borrowing and exposure to the housing market, and dealing with the impact of changes to the benefits system. Housing providers are finding it increasingly difficult to raise finance for capital investment, the report concludes. Some have had to offer additional collateral, generally in the form of assets rather than cash, to lenders because of using financial derivatives to reduce their interest rate risk. "A survey by Baker Tilly in 2012 found that 63% of registered providers who responded are now considering alternative funding other than traditional banking sources, the most popular being corporate bonds," the report states. Providers will be entitled to charge higher rents to make up for a cut in the grants to build each home. The report found that over 30 years, this change will result in increased costs to the public purse, through rising housing benefit costs, of £1.4bn, or £17,500 per home. Margaret Hodge, the chair of the public accounts committee, which will examine the NAO report on Monday, said the government was refusing to explain how many tenants would be affected by the decision to scrap target rent guidelines. "The department has scrapped the target rent guidelines for this programme, leaving vulnerable tenants increasingly dependent on housing benefits and increasing the welfare bill by £1.4bn," she said. The department has refused to be transparent about just how many tenants will be affected and by how much. My committee will want officials to regularly and transparently update their assessment of the costs and benefits of the programme so that we can hold them to account for the social and financial consequences of their decisions, particularly in light of changes to the welfare system.