Councils angry as £150m is diverted from decent homes to new homes
Fury at PM’s raid on decent homes cash
Councils have lashed out after the government withdrew funding to make their tenants’ homes decent in order to finance Gordon Brown’s £1.5 billion new homes pledge.
Around £150 million will be cut from next year’s decent homes budget for councils with arm’s-length management organisations, the Homes and Communities Agency has said.
The cash was earmarked for ALMOs that have not yet received ‘two-star’ ratings from the Audit Commission - a condition for getting the funds.
The National Federation of ALMOs estimates the cuts will hit 12 councils, with 13 ALMOs, which manage more than 160,000 homes.
Housing minister John Healey said the government’s commitment to completing the decent homes programme was ‘absolute’. ‘What I’ve said to each and every one of those [councils affected] is they are unlikely to get their decent homes programme money until 2011/12. We’re not taking it away, but saying to them it may come a year later.’
Michael White, leader of Havering Council in London, said he was ‘stunned’. Its ALMO, Homes in Havering, is expected to gain its two stars in September and had been promised £30 million if it did.
‘Asking our tenants to give up their hopes of decent homes for several years, so that new houses can be built elsewhere in the country, is a major slap in the face,’ Mr White added.
Gwyneth Taylor, policy director of the NFA, said she was ‘not at all reassured’ by the minister’s promises.
The current spending review period - in which the Treasury sets three-year budgets - ends in 2011.
‘In terms of funding, post-2011 there can be no guarantees - whoever is in power - with public spending likely to be particularly tight,’ she said.
Council homes can only be transferred to an ALMO if the tenants vote in favour. All of the affected councils had made promises to their tenants about the resources this would offer, Ms Taylor added.
In total the Communities and Local Government department will have to put £586 million towards the prime minister’s housing pledge, a spokesperson for the HCA said. Of this, £461 million will come from the agency.
The spokesperson said £128 million would be cut from next year’s ‘growth fund’, which the agency uses to pay for infrastructure in areas earmarked for housing growth.
Jill Tuck, leader of Cambridgeshire Council, said this would take £6 million from her county next year. ‘It is the worst case of robbing Peter to pay Paul I’ve ever seen,’ she added.
Another £183 million of the HCA’s contribution will come from ‘managed savings’, including ‘robust grant rates’ for social home building.
Under the government’s housing pledge, £1.5 billion will be redirected to home building, including £750 million for the national affordable housing programme, £250 million for new council homes, and £500 million to kick-start stalled private sector developments.
The affected ALMOs
- St George’s Community Housing, Basildon
- Charnwood Neighbourhood Housing, Charnwood
- East Durham Homes, Durham
- Rykneld Homes, Derbyshire
- Salix Homes, Salford
- Homes in Sedgemoor, Sedgemoor
- Homes in Havering, Havering
- Lambeth Living, Lambeth
- United Residents Housing, Lambeth
- Lewisham Homes, Lewisham
- Redbridge Homes, Redbridge
- Sutton Housing Partnership, Sutton
- Tower Hamlets Homes, Tower Hamlets
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Readers' comments (13)
Joe Halewood | 24/07/2009 10:30 am
Well what a surprise - councils are kicking off again.
Despite being no fan of this government or its housing policies, we are now seeing a £1500m investment in housing of which just £461m is being diverted from other housing programmes. That still leaves £1039m coming into housing from other central government spending - surely something that the sector should recognise and welcome.
Instead we have local government bleating on a purely parochial basis because their little area may lose out - and this is the headline here? Doesnt IH represent the whole sector or is bad news and complaint the only newsworthy items?
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Emma Sherlock | 24/07/2009 11:40 am
Any investment in housing is to be welcomed, however, should tenants also welcome delays to our Decent Homes programs?
Many people voted for Stock Transfers and ALMO's simply as a way to bring extra resources into their estates, will they now welcome further delays to home improvements as the Government raid Decent Homes funding?
The winners will be those tenants who refused to be blackmailed into Stock Transfers and ALMO's and whose moral case has now been vindicated as the HRA system comes in for review.
Local authorities that lied, cheated and misrepresented tenants, forcing them into Stock Transfers and ALMO's will pay a heavy price at the polls now that the investment has been delayed again.
If the banks can be bailed out for the common good then housing should and must be regarded as a priority in this, one of the wealthiest nations on earth.
Genuine investment is not robbery, but 'investment' that takes from desperately needed Decent Homes money is shameful robbery.
Emma Sherlock
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Joe Halewood | 24/07/2009 12:24 pm
Emma, I agree that transferring decent homes monies is a bizarre banana skin that will no doubt be used to attack this move. Yet, overall there is over £1bn 'additional' net monies coming into the sector and that has to be welcomed and even applauded. The new build will also meet the decent homes standards as well
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kass | 24/07/2009 1:10 pm
Emma Sherlock | Fri, 24 Jul 2009 11:40 GMT... You're spot on... I totally agree with you... this is another type of 2p tax shameful act from this governemnt against the weakest in our nation. Now we got encourage and support all our MPs and public opinion to deal Mr Brown the same if not a bigger blow that he was dealt when he abolished the 2p tax. while keeping saying he is listening Mr Brown has learnt nothing or refuses to.
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Howie | 24/07/2009 1:40 pm
Who are the the mugs?
Tenants who voted for stock transfer and have had their homes improved?
Or those that bought the high moral agrguments of Defend Council Housing and are facing more years of politicians and bureaucrats arguing about how to distribute HRA debt while their homes decay around them? By the time they work out a solution the coffers of the state may well be empty - so yet more waiting.
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michael read | 24/07/2009 3:15 pm
What's the betting that when the dust settles this is not simply a £1.5bn cut in spending on housing?
The re-allocation is a delay past the next election when it will crystallise into a cut even on the remote chance that a Labour government is re-elected. But the flash of hands allows the government to claim in the meantime that it is spending on housing.
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EssexMan | 24/07/2009 3:25 pm
Emma - I'm shocked at your attitude towards ALMOs and wonder how on earth tenants were 'blackmailed' into them?? You seem to suggest they're a bad thing when actually they have consistantly delivered better services to the tenants they were set up to serve.
The real travesty here is that the whole review has taken so damn long that it's unlikely anything will happen before the next election and then the Tories will take away the regulator that seems (so far) to really have tenants views at their heart.
Also the 13 ALMOs listed above who will lose out on Decent Homes Funding simpy so this current government can score afew points and MAYBE keep a couple of votes at the next election.
Yes, over £1000m is coming into housing (AT LAST!!!) but nearly half as much again will be taken from tenants who really need that money spent on their properties and who will never benefit from any of the £1.5b that will be spent on new houses.
Shame on this government who just doesn't seem to be able to do anything without breaking promises, and shame on you for not supporting tenants in real need.
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Mary Simpson | 24/07/2009 4:55 pm
I think it is disgusting that the government has treated the public in this appaling way. I have worked realy hard along with other residents to lobby local people to vote for Labour and to get the Decent road shows on the way only to find that Gordon Brown and his government could not give a hoot about us. It's not wonder they have lost to such a great extent in Norwich. I bet Lambeth will be next in the general election.
That would be a pity actually as Chuka, Florence & Betty has worked closely with us, but we will have no choice but to show our revolt in the polls at the general election and I for one will apologise to Chucka and his team.
Shame on you Gordon Brown.
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Ancient Greek | 25/07/2009 12:02 pm
Someone seriously suggested half jokingly that there is 'no Capitalist or Socialist way of laying drains' well we can now see there is.
Are not subprime mortgages and cutting Decent Homes programmes while Bankers celebrate their tax subsidized bonanzas proof enough.
Let the good times roll until the revolution then.
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Ancient Greek | 27/07/2009 9:46 am
On small but crucial for tenants and lease holders:
The Decent Homes cut or deferment of investment is immediate and could not be changed until perhaps after the next election, is ever.
The new homes would take a while to commission and start on site as we all know, perhaps again not until after the next general elections.
Lessons learned? Another shot int the foot.
Just a thought.
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