Pickles: grant withdrawal for housing associations 'might happen'

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

Communities secretary Eric Pickles has told 24dash that he foresees a period where the grant given to housing associations to build new homes might be withdrawn altogether.

Mr Pickles (pictured) - who was speaking at an event in Hereford today outlining his vision for localism - said "it might happen in the long term".

He said: "We are a fair way away from that at the moment. We have been keen to get private money involved in social housing - something that's common on the continent, but up to now has been very elusive in England."

Quizzed on whether it could happen in the next funding round post-2015, he said: "That's a bit too soon. Long term it might happen, but we're a long way away from that at the moment."

The Government has slashed the amount of money it gives housing associations to build new homes for 2011-2015 by some 63%. In its place, it wants housing associations to borrow more from charging higher rents - thus utilising a smaller amount of grant per unit - typically £20,000.

Despite the subsidy cuts, housing associations are set to deliver some 80,000 homes by 2015 under the new framework.

A number of the larger associations are also ramping up their market sales activity in order to cross-subsidise the building of affordable units.

The sector has called on the Government to reveal its plans for post-2015 as some associations fear that their organisations - especially in the latter stages of their 2011-15 programme - become too highly geared.

The move to bring more private companies into social housing is already picking up pace with six 'for profit' landlords registered with the Tenant Services Authority (TSA) and discussions with many more under way.

The move was explicitly encouraged in the Government's Housing Strategy, published last year.

Asked about transparency and the reluctance of some associations to publish their £500 expenditure, he said "their time will come".

The National Housing Federation argues that housing associations have already put in place a "raft of measures to ensure they are transparent, accountable and open in their operations".

A number of housing associations have, however, broken ranks and announced plans to publish their spending details including Home Group, Viridian and Herefordshire Housing.

Mr Pickles said: "I think housing associations have got to know their tenants have a right to know. One thing we've found with transparency is that it has started to push down costs because people can see what other folk are spending."