John prescott has told The social housing sector it must save £830m a year over the next four years, writes Chloe Stothart.

Speaking at the National Housing Federation’s annual conference in Birmingham on Wednesday, the deputy prime minister said the increasing cost of building social housing was “completely unacceptable”.

He said the average subsidy for each housing association home had more than doubled since Labour came to power: from £27,000 in 1997 to £66,000 in 2004 – a rise of more than three times the rate of inflation.

“We’ve set the Housing Corporation some pretty tough efficiency targets for the next three years. By 2008, we expect the social housing sector to deliver efficiency gains worth at least £830m a year. That includes an 8% real saving on the cost of new supply,” he said.

Prescott rounded on the current cost of houses built off site and said associations needed to be “sharper and smarter clients”.

He also hinted that mergers and stock rationalisation were needed to boost efficiency.

He said: “I don’t want to play the numbers game, and maintaining quality is vital, but in some areas there are as many as 50 or 70 housing associations. Sometimes half a dozen in one street. Each with their own offices, their own maintenance, their own management. We have to ask ourselves, is this really the best way to do things?”

In addition, Prescott backed the Housing Corporation’s efficiency index just as it attacked by two leading trade bodies.

Source

Housing Today