The Housing Corporation's National Clearing House funded house builders Bloor Homes and housing association Sanctuary Group to deliver 335 affordable homes with another potential 700 in the pipeline.
Following discussions with Bloor and Sanctuary during the summer, support was given to a wide range of proposed schemes. Allocations have since been made to fund 335 homes (mostly for affordable rent) across the country at a total social housing grant cost of £13 million.
The Housing Corporation then opened discussions with Bloor Homes about the submission of a next stage National Clearing House bid for some 700 homes which, if successful, will stimulate further construction activity which might otherwise not have proceeded.
Housing Corporation Director of Investment Richard Hill said:
"The outcome of the initial bid has met a key objective of the National Clearing House process - that of adding to affordable housing delivery at the right price and offering a positive solution where developers have unsold stock available. The deal includes a significant proportion of family houses."
"Very importantly, the successful outcome of the initial bid will now allow us to move on and consider bids to build out schemes which may not otherwise have gone ahead - maintaining affordable housing supply and retaining capacity within the construction industry."
Information Note
The National Clearing House process was launched by the Housing Corporation as part of a set of initiatives to respond to the current market and to bring homes into the affordable housing sector.
The Recruitment and Employment Confederation (REC) and Procurement for Housing (PfH) warned that the removal of a VAT concession on the wages of temporary housing staff will cost social housing organisations £135 million and lead to major job losses at a time when the sector can least afford it.
The Treasury are due to remove the tax concession granted in 1998 to recruitment agencies supplying temporary workers to the social housing, charity, social care and health sectors.
The measure, which will take effect next April, means that social landlords will pay VAT on full invoice amounts for temps, rather than just agency commission - a tax that many housing organisations cannot reclaim.
In a meeting with HMRC and the Treasury, the REC and PfH again called on Government to reconsider removing the tax concession, explaining that the rapidly worsening economic outlook is now really starting to bite in the jobs market with temporary appointments dropping swiftly.
At the meeting the REC and PfH explained that with demand for workers declining at its fastest pace since October 2001, it is essential that the Government ensures new measures do not exacerbate the trend.
PfH surveyed its member housing organisations to measure the impact of imposing VAT on the wages of temporary workers. Over 80% of respondents confirmed that they could not reclaim the tax on all interim staff as they are not VAT registered. Other social landlords reported that they have subsidiaries with charitable status, meaning they are zero rated for VAT purposes, so some temporary workers are tax exempt and others are not.
PfH's survey revealed that each housing association and ALMO estimated they would have to pay an additional £108,000 per year - a cost of more than £70 million to PfH's 650 members alone. The REC estimates that the overall cost, across all sectors, will be £400 million.
The REC is now working with PfH, the Charity Finance Directors Group, English Community Care Association and the Association of Colleges to explore options to mitigate the cost of withdrawing this VAT concession.
