15 July 2005
A government drive to reduce the cost of social housing is threatening the financial stability of registered social landlords, the Housing Corporation was told this week.
Responding to the corporation's National Affordable Housing Programme, under which RSLs will compete with private developers for grants from 2006, the National Housing Federation cast doubt on the scale of savings already achieved.
A study published last month suggested that the corporation's investment partnering approach, under which grants were focused on large RSLs, had produced savings of 9%, with 28 extra homes built with every £10m of grant.
But the NHF said the evaluation – carried out by the Chartered Institute of Housing – needed to be studied closely, as RSLs might have felt under pressure to give a less-than-accurate picture in order 'not to damage existing' relationships.
The savings reported were unlikely to be sustainable in the long term, the federation said in its response to the NAHP pre-prospectus, published on July 11. 'It is therefore vital to determine that the causal links between improvements in efficiency and delivery are genuinely the result of investment partnering and not of other changes,' it added.
At last month's CIH conference, Jon Rouse, the corporation's chief executive, said it was possible that the savings were the result of RSLs dipping into their reserves as well as improved supply chain management.
The NHF also criticised a new value-for-grant comparator, designed to test the efficiency of organisations bidding for grant, because it fails to take customer satisfaction into account.
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