Tense negotiations loom

The Housing Corporation is preparing for tense negotiations with ministers over the government's commitment to build 56,000 new affordable homes.

Housing minister Nick Raynsford this week confirmed that the corporation's approved development programme would double to £1.2 billion by 2003/04.

He said the programme ought to be able to create 56,000 new affordable homes for rent in London and the south and around 7,700 for low cost home ownership.

The development plans, revealed by Housing Today last week, were confirmed by Raynsford as he announced the full breakdown of his department's budget.

However, the corporation admitted that the development target was only approximately 10,000 homes more than existing development forecasts despite the funding increase.

The corporation and developers said the price of building in high demand areas and refurbishing brownfield sites meant the government might get fewer units for their money.

Meanwhile, Raynsford insisted the government was on target to meet its commitment to clear the backlog of council housing disrepair within 10 years.

This will include funding from the new Major Repairs Allowance totalling £1.6 billion for the next financial year, with slightly less in subsequent years as a result of transfers and Right to Buy sales, at an average of £559 per home.

A special pot of £460m has been set aside for councils allowed to set up arms-length management of their stock. But this will be limited at a total of 100,000 homes and will not be available until 2002/03.

A new Safer Communities Supported Housing Fund totalling £137m will be managed by the Housing Corporation and match-funded by local authorities to provide 5,000 new units for vulnerable groups such as ex-offenders and domestic violence victims.

Also announced were new funds to pilot innovations in lettings, the creation of neighbourhood wardens and to increase the provision of gypsy sites.

"This is all dependent on delivery," Raynsford said. "We have negotiated with the Treasury for this, they've been tough negotiations and we've had to give clear assurances that we will be able to deliver real practical results for this substantial output of resources."

Corporation assistant chief executive Neil Haddon admitted: "Costs are rising considerably, and yes, you do get less units for your money. This is a target that we are being set. We have to discuss with the department how we are going to meet that."