Homes and Communities Agency schemes worth £380 million at risk
Treasury review targets housing spending
Plans to build thousands of affordable homes with £380 million of public funds are under threat following the announcement of a government spending review.
David Laws, chief secretary to the treasury, has written to secretaries of state asking them to re-examine all spending commitments approved since New Year’s Day.
It comes as Communities secretary Eric Pickles ordered a review of the value for money of the government’s £285 million mortgage rescue scheme for struggling homeowners.
The Treasury review will look at quangos, including the Homes and Communities Agency’s expenditure on affordable housing schemes and the decent homes programme.
It will see projects deemed poor value for money scrapped, with decisions on projects already underway being taken as a priority.
The HCA has this year announced more than £380 million of funding for 36 major projects delivering 5,572 homes.
Decisions under review that were approved this year include a £27 million HCA grant to fund the first phase of the 4,500-home Woodberry Down project in Hackney.
Other decisions to be examined include £41 million towards 819 new homes on Stepney’s Ocean estate, £5 million for 51 new homes in the Ore Valley, Hastings, and £122.6 million to 73 councils as part of the local authority new build programme.
Steve Douglas, interim corporate director of neighbourhoods and regeneration at Hackney Council, said work would continue as normal at Woodberry Down and other projects. He said: ‘We have had no indication from the HCA that it is not going to honour its commitments.’
There could also be funding cuts to the housing market renewal pathfinder programme.
Jim Johnsone, director of housing renewal partnership Tees Valley Living is hoping that an approved £10 million to renew homes across Teeside will not be axed. He said: ‘We are very concerned, we need to keep our projects’ momentum going.’
Recent allocations of funding to arm’s-length management organisations under the decent homes programme are also threatened.
Gwyneth Taylor, policy director at the National Federation of ALMOs, said around 20 organisations are mid-contract and have had funding approved this year.
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Readers' comments (7)
Duncan Harvey, Affordable Housing Policy and Devel | 21/05/2010 9:11 am
I am concerned about the potential risk that existing central governement financial commitment towards affordable housing may not be honoured. As a Council we have have worked closely with the HCA to bring forward a number of very important projects that will not only provide much needed affordable housing, but has (will) support the local economy and local people. We and our developmwnt partners have strategically aligned our resources to maximise HCA investment. Any drawback of funds would have a devastating impact on our housing programme across all tenures.
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Len White | 21/05/2010 9:45 am
What madness it would be to cut these projects, with the economy scarcely out of recession these cuts would directly create additional unemployment. If you count the impact on suppliers, the cost to the public purse will be just as great as having the investment.
Gordon Brown was correct to bring forward housing capital spending to support the economy and employment, it would have been easier for him to do nothing and let unemployment rise. It seems that the new government still thinks that unemployment is 'the price worth paying'.
Every time governments face making cuts they hit capital spending hardest and the LibCons appear to have learned nothing from past mistakes. But sustained capital spending on bricks and mortar is a very efficient use of public borrowng power when the economy is running well below capacity - it pays for itself in reduced benefit payments and increased tax income.
The only conclusion you can come to is that the reason is ideological rather than pragmantic - reducing the share of GDP taken by the state is a Tory shibboleth and nothing to do with logic or economics.
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Sharlene Benjamin | 21/05/2010 1:33 pm
It would be ridiculous to cut the committed funding of housing projects. These projects are already underway and have been started soley because there was a commitment for government funding. I am sure the new administration realises that these projects would just stall without adequate funding and it would be a colossal waste of the funds that have already been spent.
For them to make any cuts in housing spending would just be crazy.
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Anonymous | 21/05/2010 3:05 pm
The Ocean Estate. on the figures given in this aricle (£41M for 819 homes) looks excellent VFM for London - @ £50,0061 per dwelling, whats not to like about that?, Whilst clearly there was spend being approved right up to the election being called thre was no sign of any kind of financial scorched earth policy being implemented, indeed the HCA can clearly point to sharply reducing Grant rates through the first 4-5 months of 2010- t(hough £98K a unit inhastings souns a mite dear!) If the minister thinks the HCA was pitchforking money out of the door for the sake of it he hasn't understood their nature (tightfisted gits IMHO) .
I mean to say we all voted Tory, because we'd get a minister who was actually called "Grant"and the first two letters of whose family name are the acronym for Social Housing- In fact I thought "Shapps" was actually and iPhone application that allowed one to access the Capital Funding Guide and all current HCA consultation from one's iphone.
Don't say we all got that wrong
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Joe Halewood | 21/05/2010 3:30 pm
Anyone think that the SP ringfence removal will now be re-examined? After all spending on SP is proven to save at least twice as much for other parts of the public purse, was removed after 1 Janaury 2010, and can now be spent on pure cost items to the public ourse with no savings elements to the public purse.
Or does tha come under Localism then with responsibility (and blame) staying with local government?
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Ivor Williams | 21/05/2010 5:50 pm
Can anyone tell me if Localism is like (Care in the Community) and we all know How that WORKED NOT.
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Rick Campbell | 22/05/2010 3:12 pm
Cutting funding for social housing is not clever and I am sure that there will be those who will have an equally valid and opposite opinion.
It will be an interesting wait until the time somebody comes up with a revolutionary idea which combines low cost rented housing in return for an element of work along with welfare benefits.
I imagine there'll be those who think itv a good idea BUT there will be those like me to whom the words "house" and "work" spring to mind but not in that order.
Be careful what you wish for and/or agree to - you might just get it.
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