Regional strategies signed off as bidding opens for £3.3bn

The government's vision to shake up the provision of housing in England finally began to take shape this week as it signed off the housing strategies for the nine English regions.

The announcement also fired the starting gun for housing associations to bid for the £3.3bn allocated to build affordable housing over 2004/5 and 2005/6 (see table).

At the Better Buildings Summit in London on Tuesday, deputy prime minister John Prescott revealed how the £5bn available for the boards from the single regional pot would be divided between councils and housing associations.

There had been concern that the strategies would require extensive rewriting because they did not put enough emphasis on delivering the decent homes standard.

But the government required only three strategies to be altered (HT 6 June, page 7): those for the east of England, London and the South-east. They were changed to put more emphasis on housing for key workers.

Mike Gwilliam, director of planning and transport at the South-east England Regional Assembly and a member of the housing board, gave the announcement a cautious welcome but added: "The relative weight of funding to key workers, important as that is, might be disproportionate given our other pressing needs on affordable housing."

John Perry, policy adviser to the Chartered Institute of Housing, said: "The big worry has been whether regional housing boards have prioritised decent homes. A lot of councils need extra capital, especially those who intend on meeting the standard without using one of the government's three options. I suspect these latter councils will find it much more difficult if they are dependent on funding coming from the regional boards if decent homes is not high on their list of priorities."

Also at the conference, Prescott said he had agreed £432m for debt-free councils and £44m for councils with debt, to allow them to build 14,000 homes. When added to councils' existing capital resources, he said, this would make £680m available for investment.

As predicted in Housing Today, he also announced that English Partnerships is tendering for a development partner to build up to 3000 homes on brownfield land in London (HT, 10 October, page 7).

The Housing Corporation was expected to announce at the end of this week how the £3.3bn for affordable housing between 2004 and 2006 has been allocated. For 2003/4, the funding was £1.4bn; the figures for 2004/5 will be £1.6bn and for 2005/6, £1.7bn.

Danny Friedman, director of policy at the National Housing Federation, said that this represented an 18% increase over last year. "This is obviously welcome and means they will now have to live up to the task set by government," he said.

The corporation was expected to split its funding programme into two separate streams: one where associations submit individual schemes for funding and another, new, one where the corporation will identify a number of development partners to receive funding to deliver a series of schemes.

The emphasis in this second programme is expected to be more towards homes being built by consortiums of large associations.

A number of these consortia are being formed in behind-the-scenes negotiations and will be expected to agree at an early stage to pass the management of the homes to local associations once they are built.

The deputy prime minister also criticised the construction industry for being too "cautious" in its approach to the use of modern methods of construction such as off-site manufacturing to cut the time taken to build new homes in high demand areas.