24 September 2004
Moves to encourage innovation in social housing have failed to bring down development costs, landlords are being warned.
The cost of building homes has risen by more than three times the rate of inflation since Labour came to power, Deputy Prime Minister John Prescott was due to tell the National Housing Federation's annual conference in Birmingham this week.
In his speech to an NHF conference on September 22, Prescott was set to describe the cost of new homes as 'completely unacceptable'. In spite of low inflation, costs have risen by more than 60% since 1997.
Even the £250m Challenge Fund, launched two years ago to encourage innovation, has failed to reduce bills.
'We're building schemes in half the time, but the costs are the same,' he was due to tell delegates. 'Where are economies of scale? Where's the efficiency gain?'
The average subsidy given to each housing association property has more than doubled over seven years from £27,000 to £66,000. Prescott refuses to accept land prices as a reason for such a dramatic increase.
'Scottish homes cost a quarter less to build than English homes because they use modern methods of construction. We've got to get better value for money,' he was expected to say.
Registered social landlords are already under pressure to make efficiency gains of at least £830m per year by 2008. This includes an 8% saving on building new homes.
Prescott was due to give his support to the Housing Corporation's new efficiency index and suggest that RSLs should rationalise. 'In some areas there are as many as 50 or 70 housing associations, sometimes half a dozen in one street. We need more efficiency for the sake of tenants and all those people who are on your waiting lists.'
PFsep2004
