Brown confirms its open season on 1.67bn grant pot

In a line buried in last Thursday’s pre-budget report, the chancellor said: “The £200m set aside to be competed for in 2005/6 will increase significantly over the subsequent two years.”

Although this move had been widely expected by the sector, it effectively extinguished any lingering hopes that some housing associations had held that private developers would be prevented from accessing social housing grant.

It also appeared to contradict the impression the Housing Corporation had given that the £200m competition was a pilot that would be subject to evaluation before any further move was made to extend it.

The chancellor also used the pre-budget report to unveil a “pilot for transforming deprived estates into mixed communities”.

It is understood that this is loosely based on the Hope VI intervention model seen in the USA. The pilot will form part of the ODPM’s five-year plan, which is now not due to be published until January (see below for more on the Hope VI model).

A Whitehall source said: “What is being talked about is a much more fundamental mixing of tenures than anything that has been done in this country before.

“When you get concentrated deprivation you don’t solve it with small-scale interventions.”

There were no details as to where the pilot would take place or how it would work. However, it is likely that areas towards the top of the ODPM index of deprivation will be targeted. These include Liverpool, Manchester and London boroughs such as Tower Hamlets and Islington.