Communities minister David Miliband has sent in English Partnerships to rescue the government’s failing flagship regeneration programme.

In a keynote speech at last week’s National Housing Federation conference Miliband said that from now on EP would take a leading role in the delivery of the 39 New Deal for Communities projects.

The programme, which was set up six years ago to regenerate some of England’s poorest neighbourhoods, has been bedevilled by internal wrangling and criticism that it has failed to deliver.

The government threatened to pull the plug on a new deal project in Leicester because of poor management, sparking the suspension and then resignation of its chief executive and its director of development. East Brighton's New Deal for Communities organisation EB4U is the subject of a local authority investigation after complaints from members of the public about how its money has been spent.

Paul Spooner, EP’s North-west director, will now be in charge of working out how the regeneration agency can help the new deal projects. EP has project management skills, powers to assemble land and experience of working with private developers. All these are in short supply at the new deal’s neighbourhood-based projects.

The decision by Miliband to give EP a bigger role follows an appeal for help to its management board from Joe Montgomery, the director of the Neighbourhood Renewal Unit at the ODPM who oversees the new deal programme.

It represents a shift for the new deal, which has until now concentrated on social projects to improve quality of life rather than physical regeneration. An EP source said: “The ODPM has finally cottoned on that housing transformation must be at the heart of the programme.”

Nigel Smith, the RICS’ regeneration panel chair, welcomed EP’s intervention, but expressed concern that it would increase the strain on the agency. He said: “It’s a good idea as long as it’s not stretched. It has a real problem with resources both in terms of manpower and money.”

The government dumped responsibility on people who were ill-equipped to deal with it

Ben Derbyshire, partner at HTA Associates

Ben Derbyshire, a partner at HTA Associates, whose firm has worked on masterplanning a string of new deal projects, also welcomed Miliband’s announcement.

He said: “The government dumped responsibility for delivering projects worth hundreds of millions on people who were ill equipped to deal with it and who may not even have run a corner shop.” But he said EP would face challenges working with the elected boards of new deal projects.

Miliband also used his speech to rebut criticism made by David Orr, the chief executive of the National Housing Federation. Orr had claimed that the government was seeking to carry out its housing growth programme on the cheap.

He said it was a “myth” that the government was seeking to put cost before quality, pointing to the high standards it was insisting on in its £60,000 home competition.

He also said he would be encouraging local councils to use their planning powers and land holdings to deliver housing for sale and rent.

He defended the government’s housing market renewal programme, saying: “The debate is not about the minority of houses that are being knocked down but about the communities that are being rebuilt.”