The government has confirmed that it is abolishing the Local Authority Social Housing Grant and at the same announced a 110 million pound increase in transitional funding to help provide affordable housing. This will bring support for housing investment to 550 million pounds in the year 2003-04, higher than in any previous year.Ministers believe changes which will come into effect on April 1st, as part of the measures outlined in ‘Sustainable Communities: building for the future’, will allow for a more strategic use of resources.
Lord Rooker said the Social Housing Grant was an unfair funding mechanism that was consistently underspent. He acknowledged that there had been concerns over the timing of the changes and the difficulties they might cause in planning new schemes but he said, “It would be indefensible to retain the current arrangements, at a time when there are pressing housing priorities that urgently need to be funded.”
The transitional funding arrangements are designed to ensure that schemes are not compromised. At the same time the deadline for submitting bids to the Housing Corporation has been extended by three months to June 30th, provided the schemes have planning permission and are programmed to start on site by the end of January next year.
The transitional arrangements will see provision for debt-free authorities increased from 175 million pounds to 275 million with the money being allocated by the Housing Corporation direct to the RSL. For authorities with debts revenue support of up to 11 million pounds will be provided to compensate them for the loss of investment income they would have expected on repayments for schemes supported by their own resources.