Grant pilot for private developers has significant loopholes, says sector

The Housing Corporation published consultation on the scheme, as well as the prospectus for the pilot extension of grant to developers, on Wednesday.

Housebuilders, private developers and social landlords are among the organisations that will be able to bid for the funding under the plans.

But the Chartered Institute of Housing and the National Housing Federation fear the consultation document has worrying provisions that could mean standards are watered down.

The worries relate to a passage that states: “We want to achieve a balance between the minimum standards currently expected in the private sector – which do not match the expectations we have for housing association residents – and the expectations (particularly in respect of governance) set out in our regulatory code.”

Nick Powell, policy leader at the NHF, said: “They are saying on page eight that they want to ensure that the services developed continue to be delivered to a consistently high standard. That’s good, but on page nine they say they want to achieve a balance between minimum standards in the private sector and the expectations in the regulatory code.

“I think that is quite telling.”

Other sources within the sector questioned another passage, which reads: “We want to avoid a framework … that is so demanding as to deter competent organisations from being willing to act as landlords and managers.”

Mark Lupton, policy analyst for the CIH, said: “What they are effectively saying is that the current standards for housing associations are too demanding and deter competent organisations. I think that is an interesting admission by the Housing Corporation.”

The document does confirm that non-RSLs, including unregistered subsidiaries of housing associations, which will all operate under different accreditation arrangements, will face contractual penalties if they don’t cooperate with corporation guidelines.

It states the corporation would then use a rent charge – a legal device registered on each property by the corporation with the Land Registry – subject to a court order, to inspect properties and order repairs, or to take possession of the properties in some cases.

The prospectus issued with the consultation, which closes on 13 May, also confirmed that all of the corporation’s £1.67bn annual development programme will be opened up to non-RSLs from April 2006 (HT 22 October, page 7).

Jon Rouse, the corporation’s chief executive, said: “This presents us with one of the biggest challenges in our history – but it also presents us with the potential to dramatically increase the supply of affordable homes using best practice from our widest ever choice of suppliers.”