黑洞社区

The government鈥檚 housing and regeneration quango is facing a funding black hole of over 拢600m and has suspended all spending decisions following George Osborne鈥檚 announcement yesterday of 拢6bn of cuts, 黑洞社区 understands.

The Homes and Communities Agency鈥檚 black hole has emerged, according to sources close to the issue, because the Treasury is refusing to confirm that 拢780m promised from other government departments to fund last year鈥檚 拢1.5bn Housing Pledge will actually be delivered.

Osborne鈥檚 announcement contained a surprise 拢170m of funding for social housing, however it is understood the Treasury鈥檚 refusal to confirm the previous funding promises from other departments means this merely reduces the size of the hole in the finances from 拢780m to 拢610m

In response the HCA has decided to suspend all spending decisions until the new chancellor鈥檚 emergency June 22nd budget at the earliest. One of the sources said: 鈥淭he CLG was given certain assurances last that the departmental transfers would go ahead, but since the Treasury is now refusing to confirm them.鈥�

The Home Builder鈥檚 Federation confirmed it had been told that 鈥渢he balance of the as-yet uncontracted Kickstart money will be on hold until after the Budget on 22nd June when the extent to which this funding is to made available in the current year is confirmed.鈥�

In addition 拢230m of further funding cuts will have to be found from this year鈥檚 budget. This includes 拢100m for new social housing, 拢50m for the housing market renewal pathfinder scheme, 拢30m for Gypsies and Travellers, and 拢50m for the Kick Start scheme to re-start stalled private schemes.

The news means that, as well as a number of social housing schemes, all kick-start schemes will remain on hold, with any un-contracted schemes likely to be re-examined to see if they will still go ahead.

HBF chairman Stewart Baseley said cutting kick start was a cut in investment not waste. He said: 鈥淧ublic money invested through Kickstart pulled in many more times that in private sector investment - which will now be lost to the economy. The announcement is extremely disappointing when we are in the midst of an acute housing crisis and a shortage approaching a million homes, yet building less than in any peacetime year since 1923.鈥�