Prime minister’s £1.5bn new homes fund sucks money from refurbishment and infrastructure schemes

The refurbishment of more than 160,000 council houses will be delayed by the government’s decision to transfer funds allocated to it to housebuilding, according to the National Federation of Arm’s Length Management Organisations.

Thirteen Almos have had funds withdrawn that were allocated to them under the Decent Homes programme. John Healey, the housing minister, announced the £150m cut a fortnight after making a speech to the Local Government Association in which he said he was “committed to completing” the programme.

The government says it will make up the shortfall in the next Comprehensive Spending Review, which covers the period from 2011, but has been delayed until after the next election.

The money has gone to the £1.5bn housing pledge, which is part of the Building Britain’s Future initiative announced by Gordon Brown earlier this month. Part of that is a plan to build 20,000 affordable homes.

A spokesperson for Redbridge Homes, one of the Almos affected, said: “We’ve made promises to people and now we’ve got to break them. It’s their new kitchen and windows and their quality of life at stake.”

Steve Trusler, strategy director at Wates Living Space, which works on both new build and refurbishment of social housing, said: “Decent Homes has been incredibly successful at both refurbishing homes and creating jobs. I can’t see the logic in not completing the programme.”

We’ve made promises to people and now we’ve got to break them

Redbridge Homes

In London, where six Almos are affected, a taskforce led by the Homes and Communities Agency has been set up to address the problem.

The government is also pulling in money from funds set aside to pay for infrastructure in some of its 75 housing growth areas. They will lose £128m of £295m capital funding in 2010/11.

The money would have been spent on roads, schools, jobs and green space, and was intended to stimulate private housing.

The government will hold a consultation with councils and delivery bodies in the growth areas later this week.

One of them, the Greater Norwich Development Partnership, will have its funding cut from £5.6m to £3.2m. Mike Jackson, director of environment at Norfolk council, said: “All of the £5.6m is committed to projects. The biggest thing holding back housing growth is the need to invest in infrastructure. Pulling funding to pay for housing is perverse.”

Another, Cambridgeshire Horizons, could lose nearly £6m from £13.7m and Didcot in Oxfordshire will lose £700,000, about 44%, of its growth funding.


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