Developers and RSLs fume at social housing shake-up

Developers and registered social landlords have hit out at the Housing Corporation over its handling of proposals to extend social housing grants to developers.

Each side claims it is being unfairly singled out in the run-up to the allocation of the corporation’s £3.2bn grant for 2006/08, which developers will be allowed to bid for for the first time this year.

The housing sector is worried that the corporation’s drive for efficiency, in the light of the government’s Gershon review to cut public sector waste, will cast individual housing associations in a bad light.

Last year, the corporation proposed creating an efficiency index for the operational costs of RSLs. The index, which was launched this week, has been altered amid strong protests from the sector after it complained that there was no consultation.

Now RSLs are worried that the corporation will make the same mistake by creating an inaccurate picture of each housing association’s efficiencies on development costs.

One senior source at a leading RSL said that a hastily conducted audit would be unfair as it would not differentiate between genuine efficiency and associated costs borne by individual firms.

The source said: “One of the concerns we have is that if you’re doing [an index] you’ve got to look at all the work we do on social inclusion that adds to our costs. At the moment none of this would show up in their data.”

The corporation has a legitimate interest in using public money efficiently

Tom Dacey, Southern Housing Group

Tom Dacey, chief executive at the Southern Housing Group, said he hoped the efficiency data would not give rise to “a bureaucracy of costs.”

He said: “The Housing Corporation has a legitimate interest in using public money efficiently. But we hope that the introduction of the development phase would take account of the lessons learned from the efficiency index.”

Meanwhile, lawyers representing private developers have complained that their bids for the grant will be restricted by corporation red tape.

Lawyer Wedlake Bill said that RSLs would be given an unfair bidding advantage because bidders with a proven track record in social housing management would be favoured. This would disadvantage developers as they are usually partnered by RSLs, which then apply for the grant and manage the social housing.

The Housing Corporation said it would judge all the bids received against common value-for-money criteria but would make allowances for new bidders. A spokesperson said: “The corporation wants housing associations and unregistered bodies to participate in the same programme and is committed to ensuring fair treatment.”