06 January 2006
Private developers bidding for grant to build new homes have had difficulty demonstrating that their bids represented value for money, the Housing Corporation said this week.
Just £140m out of an expected £200m is being allocated to developers and housing associations through the New Partnerships in Affordable Housing programme because many bids did not come up to scratch.
Four developers – Bellway, Bovis, First Base and Persimmons – will receive public funds, along with 13 registered social landlords, to build around 3,500 homes. The remaining money will be added to the corporation's larger two-year development programme, which was already worth £3.9bn.
Jon Rouse, the corporation's chief executive, told Public Finance that many private firms had been unable to provide adequate financial information without breaching commercial confidentiality. 'We will have to look at the information we need to show value for money,' he said.
Other bids were rejected because of disputes over whether schemes built under section 106 planning agreements qualified for grant. There was also some confusion over planning permission and land ownership, added Rouse.
But he defended the decision to go ahead with the pilot programme at the same time as non-RSLs were allowed to bid for grant under the major National Affordable Housing Programme. Rouse said: 'It allowed us to test processes and procedures and gave non-RSLs practice in terms of getting to grips with what was required.'
Developers and RSLs had just three months to submit bids for the relatively small sums on offer. Many, he said, preferred to wait for the larger programme, for which successful bidders should be announced next month.
Councils, meanwhile, have been told they must work more closely with RSLs and developers to show the need for new affordable housing to local communities.
Building more affordable homes, a joint report by the Audit Commission and National Audit Office, found that most councils in high-demand areas will not meet housing targets during the next three years even though homes are being built more efficiently.
PFjan2006
