07 February 2003
Deputy Prime Minister John Prescott announced that 200,000 new homes would be built in London and the Southeast in the next 15–20 years. But he told local authorities they must become arm's-length management organisations if they wish to borrow funds for regeneration in the same way as housing associations.
Those who cannot go down the Almo route must transfer their homes to a registered social landlord or rely on the Private Finance Initiative, said Prescott, as the government finally published its blueprint for the future of housing and planning, Sustainable communities.
There will be no fourth option for councils that were hoping to borrow prudentially while remaining as traditional landlords.
The Chartered Institute of Housing immediately cast doubt on the workability of the plan. Chief executive David Butler said: 'Many more councils are likely to want to keep their housing stock and set up Almos than will be able to under the government's spending plans.'
Money for Almos is being increased from £323m this year to £851m in 2004/05 and £820m in 2005/06. Only Almos that gain three stars from housing inspectors will have new borrowing powers – possibly by leaving the housing revenue account subsidy system and becoming self-financing.
An extra £685m in PFI credits, including some for new-build schemes, is being added to the £760m already allocated. Barriers to stock transfer will be removed, with special arrangements for repaying overhanging debt extended to partial transfers.
After launching the plan in the Commons on February 5, Prescott told a press conference there would be 'problems' if tenants voted against transfer and councils were unable to meet the decent homes target through other means.
Many of the new homes will be in four 'growth areas' – the so-called Milton Keynes quadrangle (embracing Bedford, Corby and Northampton); the London-Stansted-Cambridge M11 corridor; Ashford in Kent; and the East Thames Gateway along the riverside.
A total of £5bn is being spent on new affordable housing, at least £1bn of which will be allocated to homes for key workers.The government is also creating a £500m market renewal fund to regenerate nine areas in the Midlands and the North. 'Low demand requires a new approach, to recreate places where people want to live – not leave,' said Prescott.
He also announced the creation of nine regional housing boards to fund housing through a single pot, replacing the local authority housing investment programme and the Housing Corporation's approved developed programme.
Corporation chair Brenda Dean said the boards would allow it to work more closely with regional development agencies. But Sir Jeremy Beecham, chair of the Local Government Association, was concerned that councils were not guaranteed any involvement.
The Housing Corporation, which is to head a new task force to promote home ownership among council and housing association tenants, also received an extra £100m for its challenge fund, which funds new affordable housing.
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