The Housing Corporation is to create a system to control how money is allocated to private developers as part of planning gain agreements

At present developers can claim public money for social housing provision and other community facilities such as nurseries.

The corporation wants to ensure this money is spent for the purposes claimed, and to produce a formula to determine the amount granted.

Deputy chief executive Neil Hadden said the initiative was in response to concerns that money distributed to private developers through the social housing grant was not monitored properly.

The number of affordable homes funded by section 106 money is now 47% of the corporation’s budget.

Hadden said: “In the past this was a slow-burning issue. But now that it accounts for nearly half of our programme we have to assure customers that social housing grant is being used wisely and is not being used to prop up land values or developers’ profits.”

Hadden said the point of the exercise was to have a model that was robust and flexible enough to be used on every section 106 site. The corporation has already looked at two ways to develop the model and expects to come up with a workable solution by next summer.

We have to assure customers grants are not being used to prop developer’s profits

Housing Corporation executive Neil Hadden

The decision to work out such a formula marks a significant shift in the attitude of the Housing Corporation towards the issue of section 106 agreements. Previously the organisation wanted to phase them out, but now it appears committed to reform.

In a separate development the Housing Forum is to extend the scope of its customer satisfaction league tables by linking up with similar initiatives sponsored by the House Builders Federation and the National House Building Council.

Housing Forum director Judith Harrison is to meet the two bodies next Tuesday to work out if it is possible to link up its National Customer Satisfaction Survey, which names and shames poor housebuilders, with studies being worked on by the NHBC and the HBF.

Harrison has also had informal conversations with the World Wildlife Fund to see if its yearly study into sustainable housebuilders could be incorporated.

She said: “There’s no sense in having five different surveys. What we’re trying to do is draw everything together.”