We'd like a slice of the social housing grant, says St George

Developer St George has become the first private company to express an interest in receiving development grant directly from the Housing Corporation, rather than via a housing association.

The proposal, launched as a consultation paper in parallel with the draft housing bill in March, was poorly received by many housing associations (HT 27 June, page 15).

The principal concerns, expressed by associations such as Hyde and Circle 33, were that private firms would not be subjected to similar levels of regulation as associations and that it was morally wrong to pay public funds for profit.

Charmaine Young, regeneration director at St George, said she was "quite happy" to receive development grant.

"This is not a new concept," she said. "It has been done before when English Partnerships paid gap funding to developers. This included us, as well as Wimpey and Taylor Woodrow."

Young added that, as St George had worked through this process before, it had no problem with opening its books on grant-funded deals to public scrutiny. "If you want access to public money, you have to recognise there will be an amount of regulation you have to go through," Young said.

She also denied suggestions that the move would alienate housing associations. "Just as some associations are building homes for sale, we would expect mature ones not to see this as a problem."

Neil Hadden, assistant chief executive for investment and regeneration at the Housing Corporation, confirmed that St George was the only developer to have replied positively to the consultation so far.

He said, however, that he had not yet seen all of the 100 responses received. The replies were said to have been evenly split between associations and developers.

The Chartered Institute of Housing said it was worried the payment of social housing grant to developers would result in people on low incomes missing out.

Sarah Webb, CIH director of policy, said that if the proposal were to proceed, development grant would be in danger of benefiting people on higher incomes that were not in need of social housing.