The re-opening of parliament after the summer recess is always a good time to take stock of where we are in the sector, and it has been thrown into sharper relief this time around, some four months into the life of the new administration.

So where are we? Well, for my part, I am to take up a new position on 1 November as permanent secretary at the Communities and Local Government department - a role which I am honoured and excited to have been offered. But clearly we are also in a period of much more general change, with a great deal of policy work evolving, changes to the planning system, and the outcome of the comprehensive spending review which, more than anything else, will shape the immediate future.

The risk is that during times of change things will stop happening - and that too has greater portents in the current economic climate. But I do not think that things will stop happening in the housing and regeneration sector. Certainly we will all be operating with significantly reduced budgets and there is a great deal of media comment on the potential knock-on effect of cuts in public expenditure.

Challenges

While it would be naïve of us not to see these challenges coming, even in these difficult times I see good practical evidence of schemes getting off the ground, not least through ‘can-do’ housing associations and local authorities using their funding flexibly to react to local priorities.

Of course the Homes and Communities Agency is not immune to change. While Grant Shapps has confirmed that the HCA will remain, it will be slimmed down to fulfil just an investment and enabling role. Or to use his exact words, we’ll be ‘the people you call to get things done’.

But things looked quite different only two months ago when we found out the full extent of the reductions to our budget, made as a result of the coalition’s review of spending commitments by the previous administration. The outcome could have been better, but it could also have been much, much worse.

Adapting to change

Had the potential reductions been made in full it would have amounted to just under £1 billion, or about 20 per cent of our total budget, and would have had a significant impact on our ability to deliver our programmes.

The eventual reduction, at £450 million, was about half that. In the context of the other budget announcements, this gave some encouragement about the continuing importance attached to new affordable housing.

Nevertheless, a £450 million reduction still takes some managing. What we and our partners have done in completing the kickstart and local authority new build programmes that bore the brunt of budget reductions, shows that even with less money it is possible to get things done. It will be comforting to remember that in the months beyond the comprehensive spending review settlement, when the public sector en masse is digesting the potential impact of the inevitable reduced budgets.

Out of the 74 kick-start schemes that as of July had yet to secure funding, we have managed to get 44 away. That’s well over half, and the picture on LANB schemes is better still - our local teams have found a way to fund 61 out of 91 of these.

The extent to which budget reductions impact on delivery is down to how we do our work. And with Kickstart and LANB we chose to reflect the mood of localism by devolving decision making to our local delivery teams which are in daily contact with local authorities and house builders on the ground. Together they were able to negotiate.

It is true that our partners have had to dig deeper, but a little more funded through a local authority’s own resources, or a little less support requested by a house builder means a little less public money on each scheme and a little more to go around.

Dry run

By contrast we could have said ‘this is how much money we have and this is what we’re going to do with it’. But there is no doubt in my mind that that approach would have been the wrong way to go and we would not have achieved as much.

And so in many ways our experience in managing the later stages of kick-start and LANB has been a dry run for the future. The government has made introducing localism and reducing the budget deficit its defining goals, and I believe that the way we and our partners collaborated on kick-start is a marker for how we can make these potentially conflicting aims work together.

If we can also bring in some new sources of investment - such as through our private rental initiative - then it is possible to see a way to make progress in the face of much more limited resources.

Sir Bob Kerslake is chief executive of the Homes and Communities Agency

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