Death of capital funding predicted within 10 years

Figures published by the Housing Corporation this week show new completions and lettings being cut from 32,600 last year to as little as 20,300 in 2001/02.

The cuts come despite an eight per cent increase in the approved development programme over the same period, from £611m in 1998/99 to £658m in 2001/02.

A spokesman for the quango said the falls reflected its growing asis on regeneration and renovation in the face of structural changes in demand for social housing.

The figures come in the midst of a row over the future direction of Housing Corporation funding which has seen northern and southern housing associations at each others' throats (Housing Today issue 129).

Coventry-based Orbit housing association chief executive David Hucker raised the spectre of the end of capital funding within ten years.

He said: "Clearly there is still going to be a need for housing for people at the lower end of the economic spectrum but that can be supported through revenue funding rather than capital funding."

He added: "Clearly there are parts of the country where demand for social housing is falling or non-existent. But the more examples there are that come to light of unlettable housing, the less argument one can have for capital subsidy."

Hucker's comments were backed by Community housing association chief executive Mick Sweeney, who questioned the future role of Housing Corporation itself. "If the ADP is to be a kind of adjunct of New Deal for Communities, why do you need the Housing Corporation as a funder?"

National Housing Federation head of northern regions Jim Battle said it was "very possible" that the government could turn off the funding tap if RSLs failed to perform.

But the Housing Corporation said such fears were groundless. stment performance manager Fahim Kemal said there was "no reason at all" for such a view as grant rates had increased and total gross ADP expenditure was set to rise.