Comprehensive spending review to focus on development funding and key workers
The social housing sector was this week eagerly anticipating a massive £1bn boost from the Treasury as part of its comprehensive spending review.

It is expected that next week chancellor Gordon Brown will announce, in his three-year plan for government spending, a doubling of the £1.2bn the Housing Corporation hands out in grant funding.

Sources said the corporation and Office for the Deputy Prime Minister were "quietly confident" there would be more cash to ease housing pressure in the South-east.

The corporation's development funding is set to double, or at least see a "significant" increase, claim insiders. Much of the funding is likely go towards schemes to help key workers get a foot on the property ladder, such as the starter homes initiative. Money could also be used to release land for new housebuilding, sources said.

Association of London Government interim housing policy director Michael Irvine told Housing Today: "I certainly expect the Housing Corporation's budget for London to increase by around £650m-£700m."

This year's corporation Approved Development Programme for the capital stands at £544m.

But one source said: "If this increase is annual, it's extremely good news; if it's £1bn over three years it is just extremely good spin."

The review could make provisions for:

  • An extra 20,000 homes funded by a doubling of ADP
  • Better communication between housing, planning and the developers, led by the corporation
  • A balanced allocation to tackle the need for development in parts of the South and renewal in parts of the North
  • Special-purpose vehicles with responsibility for mass housebuilding, headed by English Partnerships.

The corporation refused to comment ahead of next week's spending review, but last month its chief executive, Norman Perry, told Housing Today he was looking to double the ADP as the quango has the capacity to deliver twice its current programme.

The sector should not complain over each region's slice of the funding cake, he said, adding: "We are battling for a bigger cake altogether." (HT 27 June, page 8)

There have been fears that funding will be split, with the ADP going to the South and a long-term housing market renewal fund to the North, but a source close to the ODPM said the allocations were likely to be "balanced" between the needs of the two regions.

However, one London housing insider warned: "Local authorities in London have extreme pressure to meet homelessness and bed and breakfast targets, so there might well be tension with an emphasis being placed by the government on key-worker targets."

Helping key workers buy their first home may be a vote winner for the government, but it is unlikely to win the hearts of providers of traditional social housing.

South East Regional Assembly planning director Mike Gwilliam said: "We are not sure that the starter homes initiative is the best way to spend the money. Giving people money to buy a house does not provide future stock – the Housing Corporation needs to provide more affordable dwellings."

Source

Housing Today