Reforms for Housing and Local Government welcomed

Amongst a proposed programme of savings to affect housing the HCA will make reductions to the following programme budgets:

• National Affordable Housing Programme (NAHP) – £100 million
This money is not yet allocated against any schemes.
Total 2010/11 budget = £2,401,659,000

• Kickstart Round 2 – £50  million
There are currently bids totalling £214 million that have gone through the due diligence process. The sum available to fund Kickstart projects will be reduced by £50m.
Total 2010/11 Kickstart (Round 1 and Round 2) budget = £420,200,000

• Housing Market Renewal – £50 million
This represents a reduction on the allocations announced in December and will be subject to consultation.
Total 2010/11 budget = £311,000,000

In addition to the programme savings outlined (above), further commitments on the remaining uncommitted funds for the National Affordable Housing Programme, Kickstart Round 2 and Local Authority New Build programmes will remain on hold, until Government funding decisions are detailed in the Chancellor’s 50 day budget on
22 June 2010.

The NAHP funding is currently not allocated to any specific schemes.

All affected stakeholders will be receiving correspondence from the HCA explaining the current situation and the implications.

As part of the Government’s overall drive to reduce operating costs, CLG and its Arms Length Bodies will be expected to make overall ‘in year’ efficiencies of 10 per cent in their running costs. (This will be in addition to the existing target saving of 3 per cent on operating costs as well as a 2 per cent cash standstill)

During 2010/11 the HCA will reduce its running costs in line with this. Saving will be achieved through a range of measures including job vacancy control, reducing use of consultants, reducing research and travel costs.

Commenting on the impact on the HCA, chief executive Sir Bob Kerslake said: “This represents the HCA’s contribution to Government saving on both programmes and efficiencies, and we will aim to implement these in a way that minimises impact.”

In a response The Chartered Institute of Housing (CIH) welcomed the legislative programme announced in the Queen’s Speech.  There are important reforms for housing, planning, local government, the environment and welfare which will have significant implications for housing markets and housing supply.

Richard Capie, CIH Director of Policy and Practice, welcomed the Centralisation and Localism bill.  He said: “A localism agenda that devolves greater responsibility to local authorities and local communities has the potential to create stronger local accountability around housing markets and housing supply.  Such is the scale of the challenge faced in building enough new homes and providing excellent housing services, that a more active local approach could pay real dividends in shifting responsibility for housing back to the housing market areas themselves.  We need local communities to take the lead in ensuring enough new homes are built for current and future generations but we also need to be clear about securing homes in the cases where this falls short.  With almost two million families on our social housing waiting lists, we can’t afford not to succeed.“

He continued: “CIH has long advocated a stronger role for local communities and their councils as being best placed to understand and shape housing markets.   We are enthusiastic about the potential that a localism agenda, hand in hand with local incentives and funding, could have in tackling the housing crisis we face today.  

“We do however recognise that moving from our current central and regional model will need to be managed carefully in order to minimise risk to delivery at this delicate time.   We also believe that for local authorities to be able to fully deliver on new expectations and responsibilities – from government, communities and delivery partners such as developers and housing associations – they will need to be given the powers and support to be able to succeed.  This means an appropriate regulatory environment, help to work across what can be complex housing markets, and greater flexibility to respond to what can be very different local circumstances.”

The Queens Speech also saw important legislation announced on welfare reform and the environmental agenda. 

Mr Capie concluded: “The housing sector is well placed to support government in taking forward its welfare reform agenda and has considerable experience of the barriers that welfare can sometimes provide in supporting people back in to employment.  Similarly, with over 27 per cent of our carbon emissions coming from our existing housing stock, housing providers will be keen to access funding and support for retrofitting measures – both in the private and social housing sectors"

National Housing Federation chief executive David Orr said: ‘The Government has publicly recognised that social housing represents a key frontline service and we will be making the case as strongly as possible to ministers that it should be funded as such.

‘We will continue to work closely with the HCA and CLG to establish what the implications of these cuts will be for housing associations and the communities they serve.’

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