Generous donations are flowing into the Guardian’s appeal for three homeless charities, bursting past £750,000 less than a fortnight after its launch. But what is the government doing? Looking after their own voters, again.

The chancellor is pouring another £10bn into the help-to-buy programme next year, despite the government’s own evidence that the last £10bn helped largely better-off buyers who would have bought anyway. Help to buy offers an interest-free government loan worth up to 20% of a property’s value for new-build homes. But of those using it, one in five are already homeowners: Shelter finds their incomes are higher than those of young renters in the English regions where the scheme is used most.

It has made things worse for the rest of the would-be first-time buyers, pushing up house prices further beyond their reach. Even for those in the scheme, it has inflated the price of properties they buy: new-build has outstripped secondhand by 15% since the start of help to buy.

Who benefited most? The biggest house builders, wallowing in cash poured straight into their pockets: their profits tripled since the scheme began. Persimmon hit the news when its chief executive, Jeff Fairburn, took a bonus of £110m, corporate looting straight from the taxpayer via help to buy. Some 150 senior Persimmon staff shared another £500m from the same trough. The chair resigned when his plea to Fairburn to donate to charity fell on stony ground. But as all greedy executives find, the cash is well worth one day’s embarrassing news, one blush-making annual meeting. Theresa May’s new name-and-shame list of corporate rapacity will probably not cost them much sleep, as there’s safety in numbers.

That’s just normal business as usual. The real shocker is that despite all the evidence, the government chooses to put another £10bn into the same well-filled pockets. Even the Adam Smith institute calls it “throwing petrol onto a bonfire”. If originally the scheme was to kickstart house building, it did a bit, but its main intent was to help the young who would never afford to buy. There is no possible excuse for redoubling a scheme they know largely helps the better-off buy bigger homes sooner.

What could that £10bn buy? Shelter says 125,000 new social homes could be built by councils or housing associations for those on housing waiting lists. But few of them are Tory voters. Help to buy is another help to vote Tory policy for the children of their people.

So much madness in the housing “market” is a direct cause of government action. The price of land has tripled since 1995 – and there is never more land, only inflation. The misuse of quantitative easing money not to invest in creative and productive growth, but to inflate property assets should stand as a text-book case of what never to do again.

Imagine what that £10bn could do in the hands of the charities we are raising money for this Christmas. Donations are magnificent, but what an affront donors must feel at this gross misuse of so much state money. At our telethon appeal on Saturday we listened to readers’ distress at the multiplying numbers of rough sleepers in doorways all round the country.

Homelessness – the well-predicted result of housing benefit and other benefit cuts – becomes politically dangerous when destitution floods onto the streets for all to see. Famously the last Tory government had their own MPs complaining about having to step over sleeping bags when they came out of the opera house in Covent Garden. Foreign film crews piled into Waterloo’s cardboard city as the perfect symbol of Thatcherism. Food banks and rough sleeping are now the public face of this Tory era, that will end as changing public attitudes show rising concern at so much deliberately induced destitution.

• Donate to the Guardian and Observer appeal here

• Polly Toynbee is a Guardian columnist