Funding body lobbies ODPM for right to allocate grant over five years, and plans to cut number of recipients

The Housing Corporation is lobbying the ODPM to allow it to allocate social housing grant over five years rather than two. Corporation officials hope that the move will allow it to get better value for its annual £1.4bn spending programme.

In a parallel move, the corporation is looking to increase the number of elite “partner” organisations to which it allocates funding to grow from the current 70 to about 100.

Grant allocated in the 2006-08 spending period will be open to private sector firms as well as housing associations, and some of these organisations will probably be given partner status.

At the same time, some associations are likely to be relegated, and it is widely expected that Jon Rouse, the corporation’s chief executive, will cut the number to fewer than 50 in the next few years.

A Housing Corporation source said: “We want to be able to offer the best performing associations and other partner organisations longer-term assurance about the funding they will receive from us.

“We are in discussions just now with the ODPM about extending this to five years. We will judge who gets this longer funding on past performance on delivering new homes.”

It is understood that a report set to be published by the corporation at next week’s annual Chartered Institute of Housing conference in will provide evidence to back the move.

The report, compiled by the CIH, assesses the £200m Housing Corporation pilot project, which was launched in February to pay social housing grant to non-housing associations.

Its main conclusion is that in order to realise the “potential purchasing economies of scale”, the corporation needs to commit to funding programmes for much longer than the current two years.

Corporation officials hope that this move will allow its partners to get better deals on construction materials and have greater certainty about future labour requirements.

In addition, Steve Douglas, the corporation’s interim deputy chief executive, is expected to use his keynote speech at the conference on Wednesday to call for the 70 development partners to make better use of the funds they receive to ensure they get more homes built.

To live and die in Harrogate

Mention the spa town of and most people will think of tea shops, the Yorkshire moors and grand old Victorian hotels. However, for those in the housing sector it is home to the annual Chartered Institute of Housing conference – the biggest in the sector by far.

As housing has shot up the government’s agenda so the private sector has taken an increasing interest. Indeed the role of the private sector will be one of the key topics at this year’s conference, which begins on Tuesday.

Simon Dow, chief executive of the Guinness Housing Trust, says: “If any of the big housing associations miss out on the upcoming bid round for social housing grant where they are up against private developers and other non-RSLs then they are as good as dead. It is that important – they will quickly turn from prey to predator.”

He added that as a result, associations would all be using the conference to sound out potential merger partners to ensure they were big enough to win Housing Corporation development funding.

Another heated debate over local authority funding is certain, with the publication of a report by the Audit Commission into the “national system of council housing finance” on Tuesday.

This is likely to have knock-on effects for the efforts of the 150 or so local authorities that have yet to say how they will meet the government’s 2010 Decent Homes standard.