Funding shake-up for regeneration

The government will seek to recoup much of the £4bn it will invest annually in housing and regeneration in order to guarantee essential funding for large renewal projects.

Regenerate has learned that this approach – which has been outlined in a recent policy review by the Housing Corporation – will allow the new “superagency” for housing and regeneration, Communities England, to kick-start many more key projects than is currently the case.

Steve Douglas, deputy chief executive at the Housing Corporation, told Regenerate: “We are looking at how to capture the uplift in the value of schemes that we fund. Using this money we will potentially be able to kick-start regeneration by Communities England.”

He added that local authorities in particular were “very keen” on the strategy and that it would likely be in place next year when the corporation rolled out its investment programme for 2008-2010.

Speaking at the launch of Communities England earlier this month Baroness Margaret Ford, the chair of English Partnerships, said that she hoped the agency – which will be formed from English Partnerships and the Housing Corporation – would be able to “unlock” much more development.

She added: “We are looking to use the £4bn budget to get much greater leverage for our cash… We have very complex issues on large regeneration and housing projects to deal with.”

As an example of this Ford cited the bypass in West Bedford that had been part-funded by English Partnerships and had been crucial in allowing the development of thousands of homes to proceed.

Although ruling herself out of the running for the job of chairing Communities England, Ford will chair a “transitional planning committee” including Jon Rouse, the current chief executive of the Housing Corporation, and John Walker, the acting chief executive of English Partnerships.

Walker has replaced EP chief executive John Callcutt – the former boss of housebuilder Crest Nicholson – who in December left the organisation that he only joined in March last year, to head a new government-sponsored review into the housebuilding industry.

The Communities England planning committee will spend the next four to five months planning in detail what the responsibilities of the new agency will be. It is expected to issue a consultation paper on this within weeks and for the process to be completed by the summer.

As was initially reported by Regenerate last June, the result of the regeneration review that began in April last year is that Communities England will incorporate the £836m annual budget and brownfield land and gap-funding responsibilities of English Partnerships as well as the Housing Corporation’s £3.9bn two-yearly social housing programme.

In addition to this, however, the superagency will take on a number of responsibilities from the DCLG. These will be consulted on by Baroness Ford’s committee, but are likely to include the much-maligned programme for bringing social housing up to a decent standard by 2010 (see box below).

Speaking at the same briefing as Ford, Communities secretary Ruth Kelly said that, as expected, primary legislation would be required for Communities England to become operational, but stressed she “would aim for the earliest possible timetable on this”.

Baroness Ford admitted that it was likely to be two years until the new body was properly up and running and added: “It is in the hands of the legislative timetable in the House of Parliament, so don’t hold your breath.”

DCLG director general Richard McCarthy said that once Ford’s committee had completed its work, the government would then advertise for senior management and board members.

Ford was at great pains, however, to reassure housebuilders and housing associations that the lengthy timescale before Communities England would formally exist would not affect current programmes.

She said: “We have put huge effort over the past few months into addressing precisely this point. The key priority is absolutely to ensure that we don’t take our eye off the ball in the next two years.”

Kelly would not be drawn on whether Communities England would, as has been rumoured, be based outside London – possibly in Manchester.

Alan Cherry, chair of housebuilder Countryside, said: “We have been working with both bodies over the last few years and it must be the right thing to do in terms of the future of regeneration. I would hope that Communities England will carry on assisting with land assembly and gap-funding where projects need this to get off the ground. These are key areas for us,” he added.