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A combined authority is asking the government to change legislation preventing it from funding affordable rented housing schemes using money secured through its devolution deal.
Cambridgeshire and Peterborough Combined Authority (CPCA) hopes to deliver at least 2,000 new homes through its £100m affordable housing programme by March 2022.
However, a report which went before the combined authority’s housing and communities committee today (Wednesday) revealed that does not have the legal power to fund homes for affordable rent.
Under the Rent Standard in the Welfare Reform and Work Act 2016, affordable rent terms can only be used in agreements between housing providers and either Homes England or the Greater London Authority.
CPCA said it is in “ongoing” talks with the Ministry of Housing, Communities and Local Government (MHCLG) over changes to the law.
However, the combined authority admitted that the technicality means five housing association schemes contracted for funding through its programme which are due to complete in the next three months could be “withdrawn” from the scheme if MHCLG is “unable to provide a quick solution”.
The affected schemes include 50 affordable rented units, while a further 40 homes in development could also be implicated at a later date.
CPCA has not revealed which housing associations are developing the specific schemes, though it has contracts for a total of 134 homes with Cross Keys Homes, Hastoe, CHS and Palace Green Homes – East Cambridgeshire Council’s development company.
It said it’s meeting with the landlords building the homes “looking at options on a scheme by scheme basis”.
The report before CPCA’s housing committee today said: “We have endeavoured to encourage providers to enter a dialogue with the social housing regulator, as it may have the ability to apply exemptions in certain circumstances.
“However, it appears as if the providers have other issues, for example covenants with their funders not to behave unlawfully and so are not inclined to pursue this.”
CPCA said it is “unique” in having this problem because it receives its funding directly from the Treasury under its devolution deal, while other combined authorities manage their housing programmes via Homes England.
It said the issue “appears to have been inadvertently overlooked” by legislation drafters.
A spokesperson for CPCA said: “We are confident that MHCLG will support a solution but in the meantime there is no risk to homes not being completed, or any families expecting to move in being affected as a result.”
MHCLG has been contacted for comment.