Friday, 17 July 2009

Building Britain's future: Healey unveils further boost for housing

Housing Minister John Healey today announced the release of funding to build 11,200 new homes, regenerate ten of the most deprived areas of the country and create 20,000 jobs in the building industry.

This boost follows hard on the heels of the Prime Minister’s commitment – set out in Building Britain’s Future - to invest an extra £1.5 billion towards building a total of 110,000 new affordable homes over the next two years.

Mr Healey announced a major £1.7 billion cash boost for ten local authorities in six regions under the housing private finance initiative (PFI) that will allow them to deliver 4,500 new or improved council homes as well as 1,600 new affordable rented homes.

The Minister also announced that in the last month through the Homes and Communities Agency he has released over £300 million to 50 Housing Associations across 119 local authority areas, to build a further 5,100 affordable homes. He also announced the allocation of £35 million to help regenerate almost 700 homes across 11 urban areas through the Housing Market Renewal Pathfinders programme.

Taken together the funding PFI and affordable housing funding will help to create around 20,000 building jobs.

Mr Healey also revealed that in the first quarter of this financial year alone, and despite the economic downturn, the Government is supporting the construction of 14,000 new affordable homes with over £430 million invested in those three months alone – double the investment of a year ago.

Housing Minister John Healey said:

“Building homes, creating jobs and lifting communities out of deprivation is a top priority for us in Government. I’m determined to pull out all the stops to see new homes built to meet our need for more housing in Britain.

“At a time when private house building has declined dramatically during the recession, government investment and action means more affordable homes are now being built more quickly and we are helping to keep the construction industry going. In fact we’ve doubled the investment in the homes we’re building through our affordable housing programme compared to this time last year.

“We have had to make some tough decisions across government about where we spend our money but we need to build more homes in Britain, and especially more homes available at rents people can afford. This is my top priority for this year and the next.

“The steps I’m announcing today put real momentum behind the Prime Minister’s Housing Pledge and I want to see work start on sites across the country within months.”

In a further boost to housing, Mr Healey confirmed today that there have been more than 300 bids from developers for the Government’s new Kickstart fund – first announced in the Budget and now topped up to £1 billion – to unlock stalled private sector developments. The Homes and Communities Agency is currently assessing bids and the successful projects will be announced later this month.

He also confirmed the Government has so far received expressions of interest from more than 70 local authorities across the country for the new council house building fund – first announced at the budget and now topped up to more than £350 million. The first successful bids for this will be announced in September.

As well as more high quality affordable homes, the Government wants to ensure a high quality service for the tenants who live in them. For this reason, Mr Healey today set out Government directions that will support the new social housing regulator, the Tenant Services Authority (TSA) to set high standards.

Mr Healey has today published for consultation a series of draft directions to the TSA covering rents, tenant empowerment and decent homes. The draft directions also respond to the possibility of negative RPI inflation later this year by providing a ‘floor’ of –2 per cent under rent increases in 2010/11, ensuring that Registered Social Landlords (RSLs) will not be obliged to reduce their rents by any more than two per cent next year. This strikes a balance between the interests of tenants, and the need to support investment in new affordable housing as well as improving existing homes and services.

The Housing Minister also confirmed today the Government’s decisions on priorities and efficiency savings to fund the Prime Minister’s commitment to housing as part of Building Britain’s Future. The Pledge commits an extra £1.5 billion to build 20,000 new affordable homes.

Up to £930 million towards the cost of the Pledge is contributed from other Departments, including Business, Innovation and Skills, Transport, Children, Schools and Families, Home Office and Health.

From CLG and the HCA funding will be switched from a number of capital spending programmes including the Growth Fund, the Decent Homes Arms Length Management Organisation (ALMO) Programme, and the Private Sector Renewal programme. However, in each of the areas affected the extra funding from the Housing Pledge gives the opportunity to bid for more money to build new homes. The remainder of the department’s contribution to the Housing Pledge will come from a tougher efficiency target for the HCA of 3% in operational efficiency savings this year plus the requirement to find £183 million through efficient and flexible management of its housing and regeneration programmes.

John Healey said that while this had involved some tough decisions, the direct impact on people and communities would be kept to a minimum. Savings on Growth Funds recognise that growth across the economy is slower than planned. Whilst the Government remains firmly committed to improving housing conditions for those in greatest need, completing the Decent Homes programme and continuing to invest £1bn in Private Sector Renewal.

Sir Bob Kerslake, chief executive of the Homes and Communities Agency, said:

“The funding for additional homes announced by Government this month will add substantially to our funding available for new affordable homes, helping local authorities to meet housing need in their areas and simultaneously helping house builders and RSLs to maintain new build activity. Government has had to make some difficult decisions as to where that funding should come from, based in part on the HCA’s existing wider programme, but there is a premium on new build activity and I am pleased that the sector has seen the benefit in putting an additional £1.5bn into housing delivery.”

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