Councils advised to rebuild, not refurbish

The London chief of the Homes and Communities Agency has advised local authorities that have lost out on funding for refurbishing council homes to consider knocking them down and rebuilding instead.

The news follows a decision to divert £150m of funding for the Decent Homes refurbishment programme into Gordon Brown’s £1.5bn package to build new housing. The communities department this week announced a shortlist of 270 schemes for nearly £1bn of Kickstart funding as part of the package (see table below).

David Lunts, director of the HCA for London, where six councils have been hit by the diverted funding, said they should respond by considering a more radical approach than simply improving homes. Lunts is chairing a task force that is looking at how councils should deal with the loss of funding.

He said: “This raises other ways to achieve decent homes.

In some cases it might make more sense to rationalise the stock or redevelop an existing estate.”

He added: “There may be money available for estate renewal and affordable new build and things like that.”

In some cases it might make more sense to rationalise the stock

David Lunts, HCA

The news came as it emerged that contractor Morrison was likely to miss out on millions of pounds of work because of the diversion of Decent Homes funding.

Neil Barks, head of service development at arm’s-length management organisation (Almo) Homes in Havering, for which Morrison has the contract to deliver home refurbishment, said it would have to reduce its planned programme by £39m over the next two years because of the decision.

Barks said Morrison had been planning to take on additional staff to deal with the contract, but that would not now happen. Morrison is also contracted to work for four other Almos that have suffered from the cuts: Lambeth Living, Tower Hamlets Homes, East Durham Homes and Redbridge Homes.

However, it said it only had repair and maintenance contracts with these organisations.

Meanwhile, Barratt came out the biggest potential winner as the government announced the 270 schemes shortlisted for the nearly £1bn of Kickstart funding for stalled projects. The company says the funding would create 22,400 homes and 20,000 jobs.