Housng minister says government will find at least £140m to fill the £610m gap in the HCA finances
Housing minister Grant Shapps today confirmed that the government would find some money to fill the £610m black hole in the Homes and Communities Agency’s finances which has resulted in all uncontracted publicly funded housing schemes being put on hold.
Shapps said that the Treasury would find at least £140m of the money for some schemes which had already been legally contracted. However, he also held out the possibility of the Treasury finding some more of the money.
This could mean that some of the £214m of private sector Kickstart schemes, which have been on hold since the election was called, could be reprieved.
He said: “In the next week or two we will have an allocation covering the money my predecessor [John Healey] had already spent. We’ll have to find £140m because that has effectively already been spent. The rest of the £610m is down to the Treasury - it’s how much it will spare us.”
Shapps criticised his Labour predecessor for spending money that had not yet been secured from other departments. He said: “The day I got in to office my officials sat me down and said, er, we’ve got a problem here, ’we never had that money expected from other departments’. Frankly it was irresponsible as hell to spend money that didn’t exist.”
The TSA is a quango too far, which spent £100,000 employing an agency to lobby the government ministers, including those that set it up. The TSA is toast.
Speaking in Harrogate in advance of his first major speech on social housing, to the annual Chartered Institute of Housing conference, Shapps also confirmed that the Tenants Services Authority would be scrapped, and its function to financially regulate housing associations would be passed to another body.
The regulation provided by the TSA is estimated to save housing associations £1bn a year in borrowing costs by enabling cheap borrowing for development.
However, Building understands Shapps has been forced to row back on plans announcing that the regulatory role would be passed to the HCA, as the move has not yet received Treasury approval.
Shapps said that moving the role to the HCA was just one option for where the function would go.
He said: “The TSA is a quango too far, which spent £100,000 employing an agency to lobby the government ministers, including those that set it up. The TSA is toast. But we understand that economic regulation is important from the point of view of financing the sector. We need to do the proper cost analysis to see where this goes.”