Finance: Housing May Lose out to New Jobs Campaign Government Plans to Shake Up the Funding of Local Councils Could Threaten Plans to Build and Repair Homes

Article excerpt

Housing professionals fear that when the Chancellor announces the results of the Comprehensive Spending Review in the next few days, one result will be that billions of pounds held by councils to spend on housing will instead go on "New Deal" employment projects. While local authorities favour greater flexibility in the use of the capital receipts from "right-to-buy" sales, allowing them to spend them on regeneration and job creation schemes, housing managers argue that the money is needed to renovate and build homes.

John Perry, acting chief executive of the Chartered Institute of Housing, says that there is "consternation" at proposals published in a recent consultation paper to integrate local authorities' Housing Investment Programmes into the rest of their capital budgets. The idea, he says, is "a really nasty one".

The result could be that much of the pounds 5bn of housing capital receipts held by councils would go on non-housing regeneration and employment projects. John Perry argues that this is particularly true in shire districts, where currently 70 to 80 per cent of capital expenditure is on housing.

"There is a good case for a single pot, but not if you start with such a massive backlog of repairs," says Mr Perry. The institute calculates that pounds 18bn to pounds 20bn is urgently needed to bring the public housing stock up to good condition. It adds that experience of the Single Regeneration Budget clearly shows a diversion away from spending on housing to employment- generating activities whenever capital budgets are merged. Mr Perry hopes that when the results of the Comprehensive Spending Review are published, proposals for a single pot will have been dropped, or at least modified.

But a spokesman for the Department of the Environment, Transport and the Regions said that, while he could not indicate the outcome of the consultation, he could confirm that guidelines on the implementation of the "single pot" would be published shortly after the announcement of the results of the Comprehensive Spending Review. …