Affordable homes scheme vulnerable to delays
An independent report into the government’s affordable homes programme has highlighted concerns that more than half the 80,000 homes due to be built are scheduled for the last year of the scheme.
The National Audit Office’s probe into the £1.8 billion programme also found that providers were worried they may not be able to charge rent at the same levels as originally envisioned.
Under the programme, providers can charge up to 80 per cent of market rent for new homes to mitigate against cuts to grant funding, which saw average grant per home fall from around £60,000 to £20,000.
The NAO’s analysis of figures from the Communities and Local Government department also found that increased rents will add £1.4 billion to the housing benefit bill over 30 years.
With payment of grant only due on completion of homes, the fear among some landlords is that they will be unable to claim funding for developments if they stall because of rows with local authorities over rent levels.
The NAO also found that one fifth of contracts for the four-year programme have yet to be signed.
However, the public spending watchdog labelled the scheme’s launch ‘a success’ after councils and housing associations committed themselves to exceed initial targets for new homes.
‘The affordable homes programme has made a good start, with providers committing themselves to building some 24,000 more homes than originally expected,’ said Amyas Morse, head of the NAO.
‘There are key risks, however, including the fact that more than half of the homes are planned for the final year, with no room for slippage. The final judgment on the success of the programme will depend on how well these risks can be managed between now and 2015.’