07 May 2004
The government is to give housing associations staged funding to take over council 'sink estates' as part of a package of measures announced this week to boost its decent homes standard.
Deputy Prime Minister John Prescott is to resort to a 'gap funding scheme' to allow up to 37 of England's most deprived council-run estates to transfer to housing associations.
The scheme is aimed at councils whose stock has a negative value, such as Lambeth, Sheffield and Teesdale.
Up to now, these authorities have had few options to improve their stock and Prescott's willingness to subsidise transfers is an indication of the government's determination to meet its 2010 decent homes standard.
Under the scheme, the final details of which will be revealed in July's Spending Review, the gap between the projected rental income and the amount needed to improve housing stock will be met by staged payments from the government to housing associations.
The amount available will be dependent on the Treasury's largesse but Prescott indicated he would be willing to make staged payments over a period of up to ten years.
Predictably the National Housing Federation welcomed Prescott's announcement, which opens up a whole new field of business for housing associations. A spokesman said: 'The new gap funding scheme will assist authorities with a negative value housing stock. It will remove one of the barriers to stock transfer.'
The Office of the Deputy Prime Minister will now 'hold open' the prospect of transfer in these 37 areas but the final decision will depend on tenant ballots.
As part of Prescott's assault on the decent homes standard on May 5, he also announced the expansion of the Private Finance Initiative and arm's-length management organisations – local authority housing companies. He claimed these 21 new projects would provide an extra £3bn in both public and private investment and would bring 170,000 homes up to decent standards.
Nine new PFI schemes were outlined including both Housing Revenue Account and non-HRA schemes. Manchester City Council will build an extra 1,000 homes, while the London boroughs of Islington and Lambeth will get 535 and 494 new homes respectively.
Kent and Cheshire county councils will build extra care homes.
Bassetlaw, Brent and Ealing councils are among 12 new Almos, which require their housing departments to reach two stars or above in their performance ratings.
The new schemes were announced to coincide with Prescott's claim that the government had brought 1 million homes up to a decent standard since 1997.
'We're not only improving homes for millions of people in every region, we've also given tenants more control over the way their homes are managed,' he said.