A housing association is proposing £500,000 cuts while another has warned it may cancel £1m of community projects - both as a result of proposals to restructure rents in the housing Green Paper.
This week Birmingham-based fch Housing and Care unveiled plans for a restructure to ward off the impact of rent restructuring. Meanwhile Tees Valley housing group has claimed that £1m of planned investment in communities may now have to be scaled down or withdrawn completely.

A third, Knightstone housing association warned that under the 80:20 option proposed in the Green Paper, it too would have to make cuts. Company secretary Stephen Guile said: "We're not sure who the winners would be, but it certainly won't be the majority of tenants."

fch Housing and Care is to carry out its first major restructure since the merger between Friendship and Charnwood Forest housing associations that created the organisation. The restructure, which will leave the association's multi-disciplinary local teams intact but which will simplify management structures, is aimed at a more streamlined organisation with less hierarchy.

Chief executive John Crawley said: "There is no point waiting for the effects of the housing Green Paper and the rapid changes in the care market to sweep over us. The consequences of a rent regime restricting rent increases to inflation are already predictable, and our business needs to be further strengthened to overcome them."

Tees Valley, the largest regional housing association in the north east, warned the Green Paper's proposals to link rents with market values could force it to cancel plans for a Youth Initiative Project aimed at building citizenship and responsibility among young people on estates and the development of intermediate labour market schemes targeted at unemployed residents.

The news follows warnings from Malcolm Levi, chief executive of the Home Group last week, who said rent reform could mean cuts to the organisation's refurbishment programme (Housing Today, 28 September). Both Home and Knightstone have participated in a government study of the impact of the proposed rent reforms being carried out by KPMG and HACAS Chapman Hendy.

Tees Valley chief executive Alison Thain warned that the proposals could penalise the north "because of a formula based not on quality but on house prices elsewhere in the UK." She said: "Our concern is that some community schemes will have to be cut back or cancelled because of this proposal."

Source

Housing Today