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Spending cuts: HCA faces £230 million funding cuts

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More than a hundred housing projects could be in jeopardy as the Homes & Communities Agency (HCA) was told to find savings of £230 million

Around £50 million is to be slashed from Kickstart Round Two - the agency’s much-publicised stimulus programme which aims to pump cash into stalled housing developments.

The decision follows Chancellor George Osborne’s order for £780 million of spending cuts at HCA’s sponsor, the Department for Communities and Local Government.

As a result all further spending commitments at the housing quango are on hold - leaving 109 Kickstart Round 2 projects currently in limbo, having been approved but not yet contractually agreed.

HCA’s National Affordable Housing programme will also lose £100 million, and the Housing Market Renewal programme a further £50 million.

Bob Kerslake, chief executive at HCA said: ‘This represents the HCA’s contribution to Government saving on both programmes and efficiencies, and we will aim to implement these in a way that minimises impact.’

The Treasury however said it would pump £170 million back into the HCA to safeguard social rented housing.


Where the savings will be made:

National Affordable Housing Programme (NAHP) - £100 million

This money is not yet allocated against any schemes.

Total 2010/11 budget = £2,401,659,000

Kickstart Round two - £50 million

There are currently bids totalling £214 million that have gone through the due diligence process. The sum available to fund Kickstart projects will be   reduced by £50m. A total of almost £83 million was to be allocated to unlock 5,696 new homes, including 3,503 affordable. Almost all of the schemes (85) were expected to meet Level 3 of the Code for Sustainable Homes. A complete list of the schemes announced today can be found at www.homesandcommunities.co.uk/kickstart-round-two

Total 2010/11 Kickstart (Round 1 and Round 2) budget = £420,200,000

Gypsy and Traveller programme - £30 million

The 2010/11 bidding round (on which bids have been made, but not decided) will not proceed.

Total 2010/11 budget = £45,100,000

Housing Market Renewal - £50 million

This represents a reduction on the allocations announced in December and will be subject to consultation.

Total 2010/11 budget = £311,000,000


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