If the devil is in the details, that’s certainly true of yesterday’s £6.2bn cuts announcement. It began with a surprise announcement of extra money for social housing and ended with Communities and Local Government (CLG) taking the biggest departmental hit. Now for the details.
A briefing document just released by the Homes and Communities Agency says that it will make cuts of £230m as its contribution to the CLG’s target of £780m. However, it is already looking ahead to the emergency budget in June and adds that ‘we have decided to put a complete hold on all uncommitted spending until the position is clarified in June’.
Within the £230m savings, the National Affordable Housing Programme (NAHP) will lose £100m from the budget not yet allocated against any schemes, the gypsy and traveller programme will be cut by £30m, and housing market renewal and Kickstart will be cut by £50m each.
So far, so bad, and that’s already more than the £150m cut to the last government’s housing pledge announced yesterday, but a whole series of commitments on the NAHP, Kickstart and Local Authority New Build Programme could be under threat next month.
The briefing note explains: ‘In addition to the programme savings outlined, further commitments on the remaining uncommitted funds for the National Affordable Housing Programme, Kickstart Round 2 and Local Authority New Build programmes will remain on hold, until Government funding decisions are detailed in the Chancellor’s 50-day budget on 22 June 2010.’
On Kickstart, the briefing note says that the total budget for Round 1 and 2 in 2010/11 is £420.2m and that bids totalling £214m have already gone through the due diligence process. Take off the £50m already cut and that presumably leaves another £156m that’s vulnerable in schemes around the country
The briefing note also lists 912 Local Authority New Build Schemes for which allocations of £58.9m had been agreed but where legal agreements had not been completed before the election.
In addition, housing market renewal and growth fund allocations for 2010/11 will not be confirmed until June.
With the CLG and its arm’s length bodies will be expected to make overall in year efficiencies of 10% in their running costs (on top of the existing target to save 3% on operating costs), little wonder that the HCA announced savings earlier this week.
The announcement has already prompted a strongly worded response from the Home Builders Federation.
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