Prescott: more cash and a green light for ALMOs

Deputy prime minister John Prescott presented the housing sector with an extra £2bn on Wednesday to bring dilapidated stock up to scratch and build 200,000 homes in south-east England.

In the long-awaited 70-page report, entitled Sustainable Communities: building for the future, arm's-length management organisations were the biggest winners with an extra £1.2bn on top of the existing £650m for the first two rounds.

Other areas to benefit from the extra money, on top of what the Treasury pledged last July, were:

• the four growth areas, with Thames Gateway receiving £446m and the other three sharing £164m to spend largely on infrastructure
  
• the Challenge Fund – that was massively oversubscribed – received an extra £100m to take its total spend to £300m this year
  
• the approved development programme was given £97m extra.

Speaking on Wednesday afternoon as Housing Today went to press, Jim Coulter, chief executive of the National Housing Federation, said: "At this stage it appears that there is £1.2bn extra for ALMOs on top of what was anticipated in July. There is also new money for the four growth areas and the approved development programme."

Good planning means the right homes and jobs in the right place. I emphasise the word ‘right’

John Prescott, deputy prime minister

John Perry, policy director at the Chartered Institute of Housing, said that the big push behind ALMOs would be boosted by the fact that the use of stock transfer as a means of meeting the decent homes target was politically unfavourable.

"The difficulty now is there will be a massive demand for ALMOs," Perry said, "but a lot of places like Newcastle (around 20,000 homes) and Nottingham (30,000) will want to go for the third round.

"I think this will now be hugely oversubscribed and the ODPM has got to work out how to fund this. It looks like it will have to put its hands in its pockets again," he warned.

The ODPM is going to have to work out how to fund [ALMO oversubscription]. It looks like it will have to put its hands in its pockets again

John Perry, policy director, CIH

The CIH also pointed out that additional freedoms that were discussed under the recent debate about council housing finance such as borrowing, will be confined to ALMOs that have received three stars from the Audit Commission.

Another area that is sure to cause debate is the establishment of nine regional housing boards. These will include representatives from the local government office, housing corporation and regeneration agency English Partnerships. They will be charged with advising ministers on where money should be spent to achieve the best return.

The boards will rule over a single pot of regional money that will be formed from the abolished social housing grant and combined with the Housing Corporation's approved development programme funding.