£450m housing cuts will ‘end Kickstart’

The Homes and Communities Agency (HCA) this week confirmed that both programmes will be wound down once decisions are made over which of the planned developments already in the system can now proceed.

Sir Bob Kerslake, chief executive of the HCA, said: “Effectively this will close Kickstart as a national programme.” An HCA spokesperson later confirmed: “We are closing LANB [Local Authority New Build] as a national programme.”

The news came after the Treasury this week said it was cutting £220m from the HCA’s budget, in addition to £230m cut at the end of May. All uncontracted HCA schemes have been on hold since the election, pending this week’s decision.

Kerslake said the agency would now ask its regional teams to decide which schemes will go ahead and which will be cut by the end of the month. Schemes on hold include standard affordable housing, £214m of Kickstart, and local authority new build. However, rather than the original criteria under which developers bid, schemes will now be assessed simply by how much affordable housing they produce.

Building also understands that councils are liable to lose out through this process because the Treasury has changed the rules under which it assesses the value for money of those schemes. Having previously disregarded the fact local authorities would commonly supplement grant with further council borrowing in order to build homes, it will now take this into account, meaning very few will be as cheap as housing association schemes.

However, this week’s decision did mean that a limited number of Kickstart schemes which were either signed or on the verge of signing contracts when pre-election purdah began in April, got immediate approval, gaining a total of £190m in grant. Seventy-four schemes, including phase one of Berkeley Homes’ £1bn regeneration of Kidbrooke, and Countryside’s 650-home regeneration of Canning Town, were put under review. In total Kickstart and local authority schemes worth £300m will compete for a maximum of £200m in funding.