Biggest development programme since Labour came to power will build 67,642 homes
The Housing Corporation has fought off government attempts to cut its investment programme by £350m and free up cash to give private developers to build social housing.

The news came as the corporation finally got the green light from the deputy prime minister to lift the lid on its biggest housebuilding programme since Labour came to power in 1997.

The lion's share of the £3.32bn, two-year programme will be shared between 71 registered social landlords and consortia of RSLs that have been given lucrative "partnering" deals with the corporation.

The partners will build 54,973 homes in total by April 2006.

As revealed by Housing Today last month (27 February, page 16), the total number of homes built will be 67,642.

The corporation stressed that it was already starting to see benefits from its new partnering route as it expected to get more homes for less money than previous years.

But corporation chair Peter Dixon expressed surprise that some of the most "competitive" bids had come from the 195 RSLs that bid via the traditional route.

A senior RSL source said: "The numbers are very good news. The really interesting thing, however, is the level of bids was for £8bn for more than 150,000 homes."

The corporation has spent most of the past four months arguing behind the scenes with ODPM officials over the plan to hold back £350m from the £1.67bn earmarked for 2005/6 (HT 5 December 2003, page 8). The idea had been to form a £200m pot from which developers could bid for grant to build social housing.

A senior ODPM figure said: "The decision was made to wait for the required legislation to come through in the Housing Bill [now in parliament]."

A source close to the talks said: "This is an excellent result. To take £350m out of the spending would have devastated the programme. Basically, it would not have been possible to run it over two years."

Corporation sources confirmed that there will be a bidding round for "non-RSLs" in early 2005. But funds will not be set aside for this as the corporation will not fund successful schemes until they go on site. This would not be until the start of the next two-year spending programme in April 2006.

How the grant allocations break down

  • 71 partner RSLs share £2.644bn for 54,973 homes over two years
  • 195 RSLs share £673m for 12,669 homes over two years
  • £147m for supported housing
  • £397m for 9700 homes in the four growth areas
  • £206m for 4800 homes in market renewal pathfinder areas
  • 4236 rural homes over the next two years

Source

Housing Today