09 May 2003
Smaller housing associations are being squeezed out of new development programmes as the Housing Corporation diverts money towards larger landlords.
During the coming year, 28,500 new homes will be built by registered social landlords (RSLs) at a cost of more than £1.6bn. This makes it the largest approved development programme (ADP) for seven years.
But the number of RSLs receiving money from the corporation has fallen during the past year from 385 to 353. Three years ago, the corporation funded 484 RSLs.
Eighty-one per cent of next year's programme will be divided up among associations with more than 2,500 properties compared with 57% to the same group three years ago. During the same period, the proportion of ADP going to RSLs with fewer than 500 homes has fallen from 10% to 4%.
Neil Griffiths, research officer at the National Housing Federation, said the corporation believed large RSLs were more reliable and offered better value for money. 'There is a view that they deliver more quickly.'
But the NHF is concerned that smaller RSLs, including those that serve black and ethnic minority communities, are being neglected. 'The most important thing is that RSLs provide services to local communities. That's not the exclusive right of large associations,' said Griffiths.
The focus on larger RSLs comes at a time when the corporation is concerned that associations do not always build homes to the timetable promised. Neil Haddon, assistant chief executive for investment, said the corporation discounted RSLs' forecasts by 25%, and even then many homes were built late.
Although the corporation does not presently have an explicit policy of favouring large RSLs, one was likely to emerge over the next few years – especially as it gets tough with those that deliver late. 'We will be looking to concentrate resources in fewer hands,' said Haddon.
But Griffiths questioned whether it was fair to penalise RSLs that do not meet timetables. Building sometimes proceeded more slowly than expected because of factors beyond their control, including acquisition of land and planning consent, he said.
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