Private bidders lose out on housing grant

Last week, the Housing Corporation published a list of the 98 organisations that will be allowed to bid for the £3.9bn social housing development programme, which has been opened to non-registered social landlords for the first time.

Out of the 98 bodies, 19 were submitted by non-RSLs working on their own or heading consortiums. By contrast, in July the corporation said that just under a quarter of the 110 bids it had received were from the private sector.

A corporation spokesperson said: “Most of the 11 bids that failed the pre-qualification stage were the non-RSLs.”

John Slaughter, head of external affairs at the Home Builders Federation, said the likely reason for the relatively high failure rate among private developers was the onerous regulatory demands that the corporation had imposed on bidders.

He said: “We have heard a lot of concerns about the very detailed assessment criteria that are being applied by the corporation.”

He added that the high failure rate was “unfortunate” given that the aim of the programme was to deliver greater efficiency by bringing in private sector input.

David Orr, director of the National Housing Federation, wrote to his corporation counterpart Jon Rouse this week to outline concerns about the bureaucratic hurdles being placed in the way of those seeking development cash.

Most of the 11 bids that failed the pre-qualification stage were the non-RSLs

John Slaughter, Home Builders Federation

He highlighted rules under which developers are expected to show 30-year cash flow projections for every property that they build. Orr described the requirement as “excessive micro-management, bureaucracy and inefficient use of resources”.

The federation calculates that complying with this requirement alone will cost the 98 shortlisted bidders about £2m, which could otherwise have been used to build homes in the South-east.

Bidders have also complained about requirements on developers to detail their procurement supply chains as well as information about how developers and contractors propose to split their profits.

The shortlisted bidders will be expected to submit detailed bids for schemes by early October with a final decision expected early next year.

Of the 98 bids, 14 and 24 were submitted by non-RSLs and housing associations respectively acting on their own. The biggest share, 51, was made up of associations working in consortiums.