26 November 2004
Housing associations are being asked to account for how they spend money raised when they sell on assets funded through government grants.
The Housing Corporation's review of social housing grant comes at the same time as other organisations, including private developers, are about to join the bidding process.
Most housing association developments are funded through a combination of grants and private borrowing. Under the review, the corporation will look at whether surpluses made by associations following sales to private buyers should be pooled or retained by individual landlords.
Neil Hadden, the corporation's deputy chief executive, said: 'We want to look at all the options and see how quickly it is being recycled, or whether there are better ways of using the money.'
The National Housing Federation is warning that RSLs will oppose what they see as 'back-door taxation' by the Treasury.
NHF chief executive Jim Coulter said associations were looking for more flexibility, not less. 'They want to use recycled capital grant to provide decent homes and subsidising rents,' he said.
The right of private builders and councils with arm's-length management organisations to apply for grant was confirmed on November 19 when the Housing Bill received royal assent. Non-RSLs will be able to bid for a total of £200m in 2005/06.
The corporation has pacified the NHF by proposing that non-RSLs repay surpluses from asset sales. 'It's justified to have a clawback position for the private sector, but not housing associations,' added Coulter.
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