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20,000 extra homes to be created from money from government underspend and HCA budget

The government has confirmed it is to raid the Decent Homes programme and money set aside to promote housing growth in order to fund the 拢1.5bn housing pledge launched by prime minister Gordon Brown earlier this month.

Of the funding, which is to be used to create 20,000 extra homes, 拢930m comes from underspend and re-prioritisation in other government departments. However, 拢570m comes from communities department programmes run by its quango, the Homes and Communities Agency.

This 拢570m will be made up from three areas:

拢278m from the arm's length management organisations and private sector parts of the decent homes programme and the fund for the government's four growth areas

拢183m through 鈥渆fficient and flexible management of its housing and regeneration programmes鈥�

And the remainder (拢109m) from increasing the quango's efficiency target to 3%

Ministers and officials have previously refused to say where the funding was coming from.

John Healey, the housing minister, said: 鈥�"We have had to make some tough decisions across government about where we spend our money but we need to build more homes in Britain, and especially more homes available at rents people can afford. This is my top priority for this year and the next.鈥�

He added the 鈥渄irect impact on people and communities鈥� of the cuts would be kept to a minimum.

HCA chief executive Sir Bob Kerslake said the government had made 鈥渄ifficult decisions鈥� over the source of funding for the pledge. He said: 鈥淲e are confident that we can find the funding needed this year from managed savings, with no need to look at spending on specific programmes. Next year, as well as further managed savings, government will need to find about 拢278m from the HCA's existing programme, which will come from two areas - growth and a deferral of Decent Homes funding - to minimise the impact on individual local authorities, and in particular on those who have been recognised for their high performance.鈥�

Meanwhile, the government announced that 300 developers had now made bids for the government's Kickstart fund designed to allow stalled regeneration schemes to go ahead, and which was topped up to 拢1bn total by the housing pledge. In addition 70 councils have put in bids for the 拢350m now set aside to allow councils to build new affordable homes.