Section: Housing Finance
HCA Funding for 2010/2011 Clarified
[KF] The Homes and Communities Agency (HCA) has issued a statement that details how funding confirmed by the Government for new homes would be spent. The statement follows an announcement by the Chief Secretary to the Treasury Danny Alexander, confirming £390 million funding for the HCA.
The key issues identified in the statement are:
- On 24 May reductions were made to the HCA's programmes of £230 million as part of wider efficiency saving imposed on Communities and Local Government. These were made up of:
- £100 million (National Affordable Housing Programme);
- £50 million (Kickstart Round 2);
- £30 million (Gypsy & Traveller Programme); and
- £50 million (Housing Market Renewal, subject to consultation).
- As part of the Government's announcement on the above reductions, it was indicated that Housing Pledge funding for the HCA of £780 million was not secure. However, the Treasury also indicated that £170 million of funding would be reinvested in the HCA for social rented housing, creating an overall potential shortfall in funding for the Agency of £610 million (£780 million less £170 million).
- The Government has decided that granting the remaining £610 million in full is unaffordable, given the extent of similar commitments across the rest of government. However, the Government has guaranteed that £390 million will be available this year, on top of the £170 million announced on 24 May 2010. This will be prioritised towards new affordable housing as well as meeting existing commitments on Decent Homes and Mortgage Rescue.
- In total, the £780 million coupled with £230m in programme cuts, created a total potential shortfall in funding of £1.01 billion. This, set against a funding commitment from government of £170 million and now a further £390 million, means that the HCA has a programme reduction in 2010/11 of £450 million in total. This reduces the HCA's capital budget for 2010/11 by around 10% - to £4.11 billion.
Commenting on the settlement, HCA Chief Executive, Sir Bob Kerslake said:
"We are pleased to have confirmation of the £390 million and are working on how we can use it to maximise the impact for maintaining the supply of affordable housing and creating opportunity for communities.
"We can now firm up the position with our partners to create more certainty around schemes that have been on hold.
"It also means that we are now in a position to both meet commitments across our entire funding programme, as well as providing funding for some additional affordable housing schemes."
As a result of the funding settlement, the HCA has confirmed that it will be able to meet existing contractual commitments across all of its programmes. It will also be able to provide funding for those Round 2 Kickstart schemes approved before 6 April.
The balance of funding available will be used to maximise delivery of affordable housing. The HCA local investment teams will therefore review pipeline NAHP schemes, the remaining Kickstart round 2 schemes and LANB schemes which are not in contract. They will then determine which of those can be funded with available resources based on the aim of maximising affordable housing and achieving best value for money.
KeyFact
HCA Funding for 2010/2011 Clarified
- The Homes and Communities Agency (HCA) has clarified what funding will be available for new homes in 2010/2011.
- There is a guaranteed £390 million available this year plus new funding announced of £170 million
- Cuts in budgets announced total £1.01 billion, leaving an overall shortfall of £450 million - a 10% budget cut.
- HCA will be able to meet existing contractual commitments across all of its programmes.
- It will also und Round 2 Kickstart schemes approved before 6 April.
- The balance will be used to maximise delivery of affordable housing and all programmes are being reviewed.
