Councils to be given more power over HCA development funds

The coalition government has pledged to cut the cost of quangos and hand power to local authorities, prompting speculation about the future of the HCA and its £5 billion-a-year investment budget.

The move would partly restore authorities’ influence over housing provision which was lost when the Local Authority Social Housing Grant was scrapped seven years ago.

The LASHG, which allowed councils to allocate Housing Corporation funds to developments, was abolished to allow a more strategic use of resources.

Sir Bob Kerslake, chief executive of the HCA, said he now wants to see provision ‘turned on its head’ with councils playing more of a commissioning role. ‘I can see the model moving more towards one where we jointly agree investment priorities. Then us and the local authority would commission providers to see which one would be interested in providing the type of housing that the local authority needs.’

Steve Douglas, a consultant and former chief executive of the Housing Corporation, said the new model was likely to differ from the LASHG, because it would involve authorities, the HCA and other organisations making joint decisions.

Marilyn DiCara, director of sales at Moat, said: ‘The difficulty will come when you have different opinions between neighbouring authorities. We can’t create barriers to housing for people because of where they live.’

The process is already under way in London, where three authorities have been handed more freedom over how they spend HCA funds.

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