SYDNEY — Community groups housing up to 10,000 low income people around the state could be forced to close down because of a Department of Housing bungle.
Representatives of 62 Community Tenancy Schemes say that new conditions and actual funding cuts will force many into bankruptcy, some as soon as October. In any case, they have no guarantees of funding beyond the end of the year.
"This means that the 3000 households in the schemes face the possibility of a cheerful Christmas on the streets", said Harvey Volke, of the Western Sydney Housing Information and Resource Network.
"Either that, or the Department of Housing itself will have to make arrangements to house them."
Senior department management have overridden agreements reached between their own staff and the community sector by introducing draconian new conditions for funding.
It was also agreed by the department's own staff that the current funding formula was inequitable and inaccurate.
The department provides funds to pay rents and administration costs — but these have been pegged back to last year's level, meaning a cut in real terms. Department of Housing staff have already admitted that last year's funding was insufficient.
Some groups did not receive enough funds to keep going, and are already facing voluntary liquidation. Many schemes are running monthly deficits of up to $10,000. Some others, however, received more than they could spend.
Concerned about the situation, the groups themselves paid for two research projects to gather details and to develop an alternative formula. This was done in consultation with departmental staff, but was blocked by senior management.
Instead, new conditions just released to the groups mean they will be funded for only a month at a time, that they will have to make monthly financial statements and obtain extra audits — despite the fact that they were given no funds for the extra costs.
"How can groups enter leases for six or 12 months with landlords when they don't know if they will still be in business?", asked Volke.
"In any case, the department doesn't even have the staff to
monitor these extraordinary new requirements. Even if the schemes could manage the workload, I doubt if the department itself could.
"The department has clearly made a serious mistake — but how many worthwhile community housing projects have to go to the wall with the risks that entails for tenants before it wakes up?"