24 June 2005
A move by the Housing Corporation to focus development grants on fewer landlords has led to major savings, according to new research.
The corporation's so-called partnering approach, introduced 12 months ago, has meant that an average of 9% less public money is required for each new home.
The efficiency gains, highlighted in a joint study by the Chartered Institute of Housing and consultancy Tribal HCH, represent nearly double the 5% demanded of housing associations under the Gershon review.
They mean that 28 extra homes are being built for every £10m of social housing grant handed to associations, says Investment partnering, published on June 21 at the CIH's annual conference in Harrogate.
Housing Corporation chief executive Jon Rouse told delegates at the conference that it was too early to say whether this was due to landlords dipping into reserves or improved supply chain management.
Seventy large registered social landlords received the lion's share of the £3.3bn granted in 2004/06, although 20% was held back for smaller associations.
Almost three-quarters – 73% – of RSLs said partnering helped them with long-term financial planning, while 79% said it should help them to achieve operational efficiencies. Eighty-five per cent expect to work in partnership with private developers once they can bid for grant.
The partnering approach has led to a surge of interest in mergers. But a second report, also published by the institute this week, casts doubt on whether widespread rationalisation will mean that landlords are more effective in delivering services.
While mergers are likely to help RSLs with risk and taxation issues, it is also important to retain the 'disciplines of the market' and local accountability, says the report, Is big best?
CIH president Ian Richardson's opening address highlighted the money that landlords are saving the public sector by tackling antisocial behaviour and building healthier homes. 'Bad housing is just as important in the health and education debate as school meals,' he added.
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