Tories: £25m 'black hole' in social housing plans

There is a £25 million "black hole" in flagship Government plans to build new affordable and social housing, the Tories claimed today.

Last summer Prime Minister Gordon Brown announced moves to build 110,000 new homes by reallocating funds from existing projects, as part of his Building Britain's Future strategy to tackle the recession.

Some £183 million was due to be found through "efficient and flexible management" of housing and regeneration programmes at the Homes and Communities Agency (HCA), but Housing minister John Healey has said £25 million has yet to be identified.

In a written Commons answer, Mr Healey revealed efficiencies for 2010-11 would be found "at a later stage, following an assessment of performance and delivery options".

Shadow housing minister Grant Shapps said this was "grossly irresponsible" and was likely to mean further borrowing to plug the shortfall.

In the parliamentary answer, Mr Healey said £108 million had been found for 2009-10 from efficiencies within the national affordable housing programme, community infrastructure fund, property and regeneration programme and the former derelict land grant programme.

And he said: "For 2010-11, a further £50 million will be found from efficiencies within the national affordable housing programme.

"The remaining £25 million of efficiencies will be identified at a later stage, following an assessment of performance and delivery options for 2010-11."

Mr Shapps said: "The Prime Minister is once again guilty of a financial sleight of hand. We've seen it before on the 10p tax scandal and he should know it always comes back to haunt him.

"Gordon Brown is responsible for plunging this country into the red to such an extent that we risk losing our economic sovereignty and yet funds his latest initiative with millions of pounds that ministers have admitted they will worry about after the election. Under Labour that's likely to mean even more borrowing.

"This is grossly irresponsible and just goes to prove that it's time to get rid of Labour and elect a government that will take decisions based on the long-term needs of Britain, not on short-term electoral calculations."

A spokeswoman for the Department of Communities and Local Government said: "It is quite right that the HCA seek continuing efficiency savings and build these into the delivery of its programme.

"Setting targets for the future delivery of such savings is prudent financial management - not a 'black hole'.

"As part of the Housing Pledge, ministers have always been clear that they would look to HCA to find £183 million of efficiencies over this year and next.

"They have already successfully found £158 million through a combination of effective project management and broader efficiencies.

"The further £25 million will be found from within HCA's budget as agreed last year.

"HCA are carefully managing all of their programmes and will look to identify these final savings throughout the rest of the year, and ministers are confident they will do this while delivering all of their targets.

"It is entirely appropriate to keep this situation under review given the nature of HCA's programmes and the need to maintain flexibility across their business."