And the plan to cut the income of associations comes just weeks after Prime Minister, Gordon Brown, announced that £1.5billion had been found to fund the delivery of 20,000 additional homes – the vast majority of them by housing associations themselves.
The Federation said the imminent reduction in income would come through a Government-proposed reduced rent rate for housing association tenants in 2010/11, which ministers said was necessary because of deflation.
Federation chief executive David Orr said: "We know that public spending is tight and you get a sense that in order to fund Building Britain’s Future the Government shook every sofa in Whitehall to see what fell out. But then, having accumulated enough to make an impact, they undermine the capacity of the people they need to deliver it.
"Reducing rents by 2% next year won’t just leave a hole in capacity for one year, but for ever. Not everyone will pull back from building – they will find the cuts from elsewhere – but that hole in capacity translated into homes is 40,000 in a decade. That’s 40,000 safe secure places for 40,000 families to thrive."
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