The Treasury statement this morning on £6.2bn savings in 2010-11 said there would be “£150m from savings in the last Government’s housing pledge”.
We understand £50m of this will be Kickstart, and the remaining £100m will be cuts to the Affordable Housing budget*.
There will also be consultation on cutting the Housing Market Renewal budget by up to £50m.
The Kickstart cuts (£50m) represent around 20-25% of Kickstart funds not yet contracted.
HOWEVER, it is also clear that around £600m of housing programmes, including the Housing Pledge, await final confirmation from the Treasury. As a consequence, the 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.
THEREFORE, all Kickstart schemes not yet contracted are on hold and at risk (I would say serious risk) until after the Budget. House builders involved in Kickstart will get a letter shortly from the HCA explaining the situation.
I understand there are no plans at this stage to review any contracted schemes. However given the very large additional savings CLG may have to make, I think this must remain a possibility.
The only decisions about quangos to date are to close the Infrastructure Planning Commission (IPC), which will become a new unit probably inside PINs, and the closure of a local government standards board. However it seems a safe bet that the HCA’s budget will be cut.
Note: The £1.165bn cut in local authority funding mentioned in this morning’s Treasury statement comes from a whole range of government departments, not just CLG.
*The Treasury statement referred to “£170m to safeguard delivery of around 4,000 otherwise unfunded social rented homes to start on site this year”. We understand this additional £170m is for social rented schemes, whereas the focus of the £100m cuts in Affordable Housing spending will be Low Cost Home Ownership. I regret I have no more details on how exactly these two numbers can be reconciled.
John Stewart
Director of Economic Affairs