Grants brought forward to protect build numbers

In a reversal of the policy announced when the four-year programme kicked off in 2011, the HCA will now pay associations 50 per cent of grant allocated for each scheme as soon as starts are made onsite. Grant payments, totalling £1.8 billion, were originally due to be made only on completion.

The HCA wrote to all housing associations and local authorities involved in the scheme on Thursday to inform them of the change. Private developers that are also building homes under the programme will not be eligible for early payments.

‘It’s designed to help maintain delivery momentum,’ said an HCA spokesperson.

The spokesperson added that the move would also help to ‘mitigate against the backloading of the programme’, a risk highlighted in a recent National Audit Office report.

Earlier this month, the NAO found that more than half of the 80,000 homes due to be built under the programme were slated for its final year in 2014/15.

HCA chief executive Pat Ritchie told the Public Accounts Committee last week that the HCA could re-allocate funds from one provider to another.

‘If a provider isn’t able to deliver on a specific site that was identified when the bid was first made, there is the ability to shift around within the programme to firmed up sites if there is a particular issue,’ she said. ‘We also have provision to move around between providers.’

Ruth Cooke, chief executive of Midland Heart, which has a contract to build 1,685 homes under the programme with a £39 million grant, said she was unsure whether the new arrangement would encourage providers to bring schemes forward.

‘It’s helpful but it’s not the answer,’ she said. ‘It’s not the availability of cash that stops schemes coming forward but planning.’

The HCA’s corporate plan, released earlier this month, revealed that more than 80 per cent of the homes in the programme were earmarked for the final two years. The plan said it targeted 8,520 completions for the current year.