Council house building funds tripled as Brown bids for re-election
Uncertainty over source of £1.5bn housing fund
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There is uncertainty over where the £1.5 billion for affordable housing announced by Gordon Brown this week is coming from.
The prime minister has attempted to kick-start his re-election campaign by redirecting the funding for new housing development over the next two years. He said his strategy would increase the number of affordable homes built before 2011 by 20,000, to 110,000.
The extra cash will more than triple funds available for council house building, to £350 million. A further £500 million will be allocated to the kick-start fund for stalled private sector developments, and £750 million to the national affordable housing programme. But the move was marred by uncertainty about where the cash would come from.
The Treasury said £690 million would be taken from capital programmes within the Communities and Local Government department. The rest would come from underspends elsewhere - £350 million from transport, £200 million from education, £240 million from health, and £90 million from the Home Office.
But a Home Office spokesperson said it did not ‘recognise those figures’. The CLG would only say that details of which programmes were due to be tapped would be released within weeks. Richard McCarthy, director general for housing and planning at the CLG, said: ‘It will not all be born by the decent homes programme.’
Sir Bob Kerslake, chief executive of the Homes and Communities Agency, said: ‘I think this is deliverable in a way that minimises the impact on major programmes.’
David Montague, chief executive of London & Quadrant Group, said he would ‘take the assurances of government’ on this. ‘There are some tough choices but I believe investment in housing improves the life chances of millions of people,’ he added.
The new investment will add £250 million to the fund announced in April’s Budget for building council housing, funding another 3,000 council homes, taking the total to 3,900.
John Bibby, secretary at the Association of Retained Council Housing, said this was ‘still a fraction of the number of homes local authorities could build’.
The HCA will also begin offering land to developers in exchange for an equity stake in the completed scheme, which will see at least 1,250 homes started by 2011, nearly half of them affordable.
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