Optivo boss Paul Hackett says pledged 拢2bn is not enough
The chair of the group representing London鈥檚 biggest housing associations has said the government needs to increase the sector鈥檚 funding threefold if the sector is to meet the demand for affordable homes.
Last month prime minister Theresa May said the government would set up a 拢2bn long-term funding pot to help housing associations build more affordable housing in the coming years. The money will also be used by associations to develop schemes themselves.
But Paul Hackett, chief executive of 44,000-home social landlord Optivo, and chair of the influential G15 group of the biggest London associations, said the government needed to stump up 鈥渨ell over鈥� 拢6bn every year to meet demand.
鈥淭he next step is looking at the scale of the challenge and how we can fund it鈥�
Paul Hackett, G15 / Optivo
He added: 鈥淟ong-term deals are something the sector has been asking for [鈥 that鈥檚 incredibly welcome. Now that it鈥檚 been acknowledged, the next step is looking at the scale of the challenge and how we can fund it.
鈥淭he next question after you鈥檝e established need and how to achieve it, is the funding that鈥檚 required to deliver that, and that鈥檚 much more significant than the 拢2bn that鈥檚 been promised so far. You鈥檙e going to need well over 拢6bn a year, in my estimation, to get anywhere near the number of affordable homes that are required.鈥�
The government鈥檚 current affordable housing programme is worth around 拢2bn a year until 2021, with the additional 拢2bn promised by May being available for schemes running after this until 2029.
Hackett said 145,000 affordable homes are needed every year compared with the fewer than 50,000 being built now, with Optivo itself targeting build rates of 1,500 homes annually by next year.
And he said the industry should ask for the extra cash now, with the upcoming Budget due to be unveiled in 10 days鈥� time.
However, he strongly welcomed May鈥檚 announcement last month at the National Housing Federation summit in London as a sign of the sector鈥檚 newfound political support.
鈥淲e鈥檝e seen a huge improvement in the relationship,鈥� he said.
鈥淚t鈥檚 important to give government credit for listening and understanding what housing associations are saying would be the right conditions under which we can maximise delivery.鈥�
Hackett said the wider construction industry needed to up its game regarding modular construction.
鈥淚 had a bad experience with a modular scheme where we had a contractor go bust midway througha contract. It added considerable cost and time. Historically, it鈥檚 been a cottage industry.鈥�
The G15 is working with the Greater London Authority and consultant Cast on a pilot around modular build techniques and the potential for associations to work together to aggregate demand.
No comments yet