Agency to hold back a quarter of the 2015-18 programme to halt volatility in housing construction

Andy Rose

The Homes and Communities Agency is to hold back a quarter of the £1.7bn 2015-18 Affordable Homes Programme to spend later in a bid to avoid the huge delays in starting schemes seen in the current programme.

In addition, housing associations and housebuilders without a strong track record of delivering affordable homes will be excluded from bidding for a portion of the 165,000-home programme unless they indentify the specific schemes that will benefit.

The two changes to the way the programme is allocated were revealed today as the HCA published its delayed prospectus for bidders to deliver the 2015-18 programme. The prospectus was originally to have been published before Christmas, alongside the Greater London Authority, which published its version of the prospectus, worth £1.3bn, on December 12.

Both of these changes are thought to be designed to avoid the situation under the current 2011-15 programme, which saw a hiatus in social housing starts because funding was agreed without specific schemes being identified. The HCA said the approach will encourage bidders to bring forward a higher proportion of firm and realistically deliverable schemes at the outset as it will allow them “to respond to development opportunities as these arise.”

HCA chief executive, Andy Rose (pictured), said he hoped that delivery under the new programme would be able to start “from day one.”

He said: “We have taken the opportunity to introduce new features which reflect some of the views expressed from partners during the current programme and during the programme development. As a result, we are setting in place a solid foundation for delivery post 2015, that builds on the success of the current programme.”

Bidders will have to complete the prospectus by noon on April 30 in order to qualify for funds.

In a statement the HCA said that 25% of the 2015-18 programme – worth £425m – would be retained for “future bids” under “ongoing market engagement”.

New providers and existing providers without “a proven track record of good delivery” will not be able to bid for funds without identifying the specific schemes the grant will be used on. Only those with a track record will be able to make bids on the basis of both “firm schemes” and “indicative proposals.”

The HCA’s prospectus is for bids to subsidise the construction of affordable housing outside of London, with the GLA’s earlier prospectus covering projects in the capital. Unlike the GLA’s programme, the vast majority of the funding available will go to so-called “affordable rent” homes set at a maximum of 80% of market rents, and affordable home ownership. The GLA introduced an additional category – “capped rent” – to recognise the fact that the affordable rent product was still far too expensive for many in need of housing in the capital.

The programme will also incentive whole-life costing and innovative construction techniques.

Housing Minister Kris Hopkins said: “Housebuilding is an essential part of this government’s long-term economic plan. That’s why we have designed an ambitious new scheme to build affordable homes at the fastest rate for 20 years.

“Our programme will support 165,000 jobs in construction, sustain thousands of small businesses and provide homes where future generations can live and raise families of their own.”

The full prospectus is available here.