Cracks starting to show

The official ‘don’t panic’ approach to the delivery of the £1.8 billion affordable homes programme is starting to have the whiff of Corporal Jones about it.

Housing associations have been getting friendly calls - albeit from people with a slightly shrill edge to their voices - asking if they would be able to deliver additional homes on top of their existing commitments.

There have been mounting clues in recent months suggesting providers might struggle to deliver the numbers they have promised. And now, for the first time, senior housing sources are telling us that bigwigs at the Greater London Authority are expressing their ‘concern’ about the programme. They are worried about the speed of delivery so far and whether all the providers on the programme will be able to deliver the number of homes promised.

As our survey of the top 50 developers revealed in June, housing associations have lined up enough land to build 49,978 homes by April 2015 - out of 99,604 they said they will deliver. Sites had yet to be found for 16 per cent of the 29,931 homes landlords plan to build next year.

Weeks later, at the start of this month, the National Audit Office warned the volume of homes scheduled for delivery in 2014/15 - the final year of the scheme - could be problematic if there are any delays. Last week, we revealed that the Homes and Communities Agency had told housing providers it will pay them 50 per cent of the grant allocated for each scheme as soon as starts are made onsite - the original policy had been to pay only upon completion.

Against this backdrop, as one senior figure put it to me last week, it might not be time for panic stations but a healthy concern is more than sensible.

Quite reasonably, the HCA can point out that some slippage was always likely in the programme and it had always clearly stated that it would reallocate some resources. But the government and HCA need to think very carefully about whether 50 per cent upfront is really going to give providers enough certainty to swallow the risk. Get it wrong - as this week’s Office for National Statistics figures demonstrate - and we all lose.