The National Audit Office is to overhaul a key element of the Housing Corporation’s efficiency regime amid fears that it unfairly penalises housing associations.
Critics believe the Housing Corporation’s league table on development efficiency, which assesses how housing associations spend their social housing grants, rewards lowest costs rather than value for money.
Housing associations fear that a poor rating will jeopardise their chances of getting social housing grant, which private developers can now bid for.
The audit office has changed the name of the table from “development efficiency” to “value for grant”, and is attempting to make the model more sophisticated by introducing extra variables.
One source close to the cross-sector working party on the proposals, made up of the Housing Corporation, the audit office and the associations, said the sector needed to be confident that the mechanism used to assess them was fair.
The source said: “It’s got to be an index of how reliably associations produce affordable housing. An association could be cheap, but you’ve got to look at the quality, the location and the number of people it houses as well.”
The Housing Corporation introduced its efficiency regime last year in the wake of Sir Peter Gershon’s report on how to cut government waste.