A six-month funding logjam for English Partnerships’ schemes appears to be easing since the creation of the Homes and Communities Agency in December

Regional directors at the agency have been told they can take up to 10% of the funding previously allocated to affordable homes to fund other things, including stalled regeneration schemes.

The news follows the decision by EP last summer to pull funding for a number of schemes because it was running short of cash. Government agency EP ran short of cash because it receives half of its money from the sale of land assets, which have been hit by the housing downturn.

EP has never admitted which schemes were affected by the problem, but chair Robert Napier said all but legally committed expenditure was pulled.

However, in December EP merged with the Housing Corporation to form the HCA, a move that added the corporation’s £8.4bn funding pot to the budget.

A source at one of the affected schemes, who declined to name the scheme involved, said: “We are already hearing noises about a number of schemes being put back on the table. We haven’t been promised anything yet but we’re now expecting a positive commitment before March.”

It gives us some flexibility to move money. It doesn’t mean we can spend it willy-nilly

HCA source

A source within the agency said each region had been allowed to take 10% of its allocation of the former Housing Corporation’s affordable housing grant, and use it for other projects if it was deemed likely to lead to the construction of more homes.

The HCA source said: “It doesn’t mean we can spend it willy-nilly. But it gives us some flexibility to move money between programmes if required.”

An HCA spokesperson said: ”We’re encouraging directors to be flexible.”