Why this governments proposal for institutional investment in the Private Rented Sector is doomed to fail

The latest proposals from the Government to secure big business investment in the private rental sector the so called 'build-to-let' are laudable but I suspect they are doomed to fail.

Anybody over 40 will recall that we have been here before. The Conservatives had a go at encouraging institutional investment into the private rental sector to re-invigorating the private rental sector with there own initiative which tried to draw in private investment through what was then called the Business Expansion Scheme (BES).

This scheme incidentally scrapped by New Labour in 1994 was showing some success in securing private funds into a sector which we can all agree will benefit from an injection of larger scale private landlords.

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However, looking at the latest proposals on the table all that one can think is that it is doomed to fail.

For a start look at the current governments track record in attracting and sustaining a coherent policy for any kind of investment in the physical infrastructure of the country.

Some examples so far are:

1. The way they failed to stand up to the EU and caved in to Europe over one of the most successful and innovative methods of regeneration funding this county and Europe had seen.
What I'm talking about is English Partnerships which helped establish the Partnership Investment Programme (PIP) in 1994 to support the physical regeneration of deprived areas. PIP provided gap-funding and innovative partnership mechanisms to enable developers and other partners to undertake schemes where legitimate development costs would otherwise exceed end values. The programme closed to new applications in December 1999 when the European Commission ruled that it was in breach of the State Aid rules and therefore not compatible with the principles of the Common Market so the government scrapped it.

2. Casinos

Originally the government told us that there were going to be up to 40 then it was 17 casinos ,
1 super casino, eight small and eight large, then no super casino, then no regional casinos either only the bills faced by the councils and organisations that put together the proposals.

3 Building Schools and Colleges for the future

The government were committed to building or rebuilding every school in the country over 15 years and then every college. Watch how this all goes by the way in light of the financial down turn leaving many schools and colleges in crisis as they try and work out how they are going to cope with a half demolished campus.

With a commitment and coherence like that from this government we should all be a little sceptical that the latest plans for the private rented sector will be seen through. Not least is the likelihood that the government will be booted out next year. Then it will be a case of waiting to see what the Tories have to offer. Anybody know what their thoughts are for the private rental sector? If so please post them below so we can all be enlightened. My personal view is that any plans will be put on the 'back burner' as a low priority whilst they sought out the other major problems in the economy and the burgeoning debt.


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