GLA officials in talks with communities department to devolve decisions on £1bn of public funding

Plans to devolve powers over the £1bn of annual public funding for housing in the capital to mayor Boris Johnson and London boroughs are being worked up by officials.

A panel comprising Homes and Communities Agency (HCA) chief executive Sir Bob Kerslake and officials from the Greater London Authority (GLA) and the communities department is examining whether some investment powers can be given to the GLA this summer, before new legislation comes in.

These powers could include the mayor getting full power to make decisions over public funding for large schemes of more than 150 units, according to a source close to the discussions. Currently the mayor has oversight on large schemes but does not make the final decision on funding.

The coalition has already said it plans to devolve housing and other powers in the capital to the mayor and London boroughs, and will bring this forward in a localism bill this autumn. However, if passed, the legislation will not come into effect until April 2012, when Johnson faces re-election.

The source said: “The panel is discussing what immediate powers can be in place from this summer to be able to make decisions that are more relevant to London. April 2012 is not soon enough.”

A meeting of the HCA London board on 21 July will examine the proposals. It will also consider whether to take forward plans to devolve other housing powers to councils - so-called double devolution.

This includes giving councils indicative budgets and allowing them to select which contractors, developers or housing associations they work with.

Richard Blakeway, the mayor’s housing adviser, said: “The national housing programme doesn’t currently meet London’s housing need, so we want powers because we think the mayor will deliver better outcomes.

“However, we’re really serious about double devolution and we’re looking at giving boroughs an indicative share of the budget and power to choose development partners.”