All but three London local authorities will need to find £15m if they are to press ahead with their £140m development programme this year, in the wake of the abolition of local authority social housing grant.
Officials at the Office of the Deputy Prime Minister held frantic meetings over the last ten days to discuss how to deal with the growing problem of the abolition of LASHG.

Figures circulating between London councils show that indebted councils in the capital expected this year's LASHG to cover the cost of around 1000 homes.

The decision now facing 30 London councils is whether or not they can afford to pay to borrow money as part of their basic credit approval – the amount of money councils are permitted to borrow by the government. This would cost £15m.

Those councils without debt are Barking and Dagenham, Bromley and the Corporation of London.

Meanwhile, the ODPM last week faced a barrage of angry letters from the sector outlining concerns about the abolition of the grant by April, and the threat this represented to building the planned amount of social housing (HT 21 February, page 7). Over 6500 units were built last year and there were plans to build a similar number over 2003/04.

At an event on Wednesday, junior housing minister Tony McNulty confirmed the government would review transitional arrangements.

Source

Housing Today