Data shows 80 per cent of programme not yet ready to start onsite
HCA defends 2015 completions targets
The Homes and Communities Agency has insisted it is still on track to meet its 2015 build target, despite figures revealing that four fifths of funding is for schemes that are not yet ready to start onsite.
Data released by the HCA this week showed that just £219.4 million of the £1.07 billion of grant allocated to the affordable homes programme outside London has been ‘confirmed’ by providers, meaning the majority of landlords are not ready to build.
The figures reveal £855.4 million of grant is attached to schemes where providers are not ready to start onsite or have not identified sites.
Fiona MacGregor, head of affordable housing at the HCA, said the slow start to the 2011/15 programme of building nearly 63,000 affordable homes was a consequence of providers not starting to sign contracts until autumn last year.
‘We’ve had about six months of starts so it’s not something I am worried about at this point,’ Ms MacGregor said. ‘We would expect them to pick up over the course of the year.’
Grant is usually ‘confirmed’ by a provider when planning permission has been agreed and it is ready to start onsite.
The HCA said last month that it would bring forward 50 per cent of grant for every scheme as they start, rather than pay the full amount only on delivery as first intended. The move has been seen as a response to concern that the programme was back-loaded, with too high a proportion of schemes scheduled to be built in the final year.
Great Places, which has the second largest allocation outside London - a £40 million grant to build 1,751 homes - said around 80 per cent of its sites had been identified. But Pete Bojar, assistant director of development at the 15,000-home landlord, admitted there may be concern around the level of unidentified sites nationally.
‘I suppose there’s a worry in the HCA that schemes that still have unnamed sites are going to be a problem because the window [to start] will rapidly close,’ he said.
The HCA has said that it will decide whether to review the programme at its halfway point next March, but Ms MacGregor denied that it would be reallocating grant in the near future.
‘We keep an eye on what people are doing and all of our forecasts look quite strong,’ she added. ‘There is not a “drop dead date” for reallocating grant because we don’t see the need for it.’
Last month, a National Audit Office report highlighted ‘key risks’ around the fact that more than half of the homes on the affordable homes programme were slated for the final year.
‘To a certain extent the government has shot itself in the foot by the way they have structured the programme, given it takes a while to work up new schemes,’ said Howard Webb, a director at consultancy Sector. ‘Housing associations would have been very silly if they had spent money working up schemes before they knew if they had an allocation.’
The HCA’s data also showed that the average grant for each home outside London is £17,116 and that landlords were charging an average of 78 per cent of market rent on schemes under the programme.
The Greater London Authority is responsible for building 22,000 homes in London under the programme. Of these, most are expected to be offered at some way below the maximum 80 per cent allowed.
number of homes HCA will deliver outside London by 2015
total grant allocation by HCA
average grant per home (excluding London)
grant confirmed by providers