Treasury secretary’s decision to determine how much of £610m funding black hole will be filled

The Homes and Communities Agency will hear this afternoon how much money it has to fill the £610m black hole in its funding which has led it to put much of its development programme on hold.

Treasury secretary Danny Alexander is to make a statement to the Houses of Parliament at 4pm on the “End Year Flexibility” system which the previous government had used to fund programmes from the expected underspend at other departments.

Last year’s £1.5bn Housing Pledge by Gordon Brown relied on £780m of money from other departments, money which the Coalition says was never received by the HCA’s sponsoring department, Communities and Local Government. In May the Treasury pledged an initial £170m to cover this, but said the HCA had to wait for the review of all End Year Flexibility-dependent programmes to see if it would get any more funding. The HCA put work on hold in response.

Schemes on hold include those relying on affordable housing grant, £214m worth of private sector schemes through the Kick Start programme, and local authority new build homes.

Once the HCA has a final budget, it will be able to work out which schemes to cut.

In total, the Treasury says £9bn of promised funding was originally supposed to be forthcoming through the EYF system, with approximately £1bn unlikely to be found.

The £9bn figure includes £2.5bn promised to what was the Department for Children, Schools and Families, some of which was to go on the Building Schools for the Future Programme.

There is also likely to be a separate announcement this afternoon by education secretary Michael Gove on the future of this programme.