Housing Today can reveal that the Chancellor has agreed to the provision of 56,000 new affordable homes in high demand areas as part of his spending package unveiled this week.
The rise in spending - averaging at 12 per cent over the three year period - will also fund a massive extension of the low cost home ownership programme, including substantial investment for the new Starter Homes Initiative aimed at key workers.
Government insiders also disclosed that the settlement will provide an additional £300m for housing Private Finanace Initiative schemes.
Ministers and officials at the Department of the Environment, Transport and Regions are said to be delighted with the announcement, which they see as an endorsement of the housing Green Paper.
"It's very good news," a source said. "This is backing up all the stuff in the Green Paper and its enabling us to take it forward."
The increased funding comes with the proviso that new public service agreements are met by the department. It must modernise 500,000 homes by 2004 and reduce the number of families living in substandard housing by a third by 2004, as part of a drive to ensure all social housing is up to standard by 2010.
Brown said: "Both government and communities must raise their sights, with a new target to raise the poorest areas up and thereby narrow the gap between these areas and the rest of the country."
The development funding for the Housing Corporation and the new PFI credits will be confirmed next week by housing minister Nick Raynsford.
New development will only be funded in high demand areas, with the existing housing needs index likely to be used as a guide.
Raynsford is also expected to announce how much will fund arm's-length management pilots and the full breakdown of the budget.
Investment for housing and regeneration for this year is £4.462 billion. Following that it will rise to £5.664 billion, then £6.361 billion reaching £7 billion in 2003/04.
Source
Housing Today
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