Cut to grants for new social housing in bid to ‘increase delivery’

A cut in grants to housing associations to build new houses has been announced in a bid to deliver more social homes in Northern Ireland.

Communities Minister Gordon Lyons described a challenging financial context in which to deliver a commitment in the Stormont Executive’s Programme for Government of 5,850 social housing starts in this Assembly mandate.

He announced a number of changes designed to increase the delivery of new social homes, including a reduction in the grant which housing associations receive to construct new homes.

He said in the interest of securing the maximum possible number of new social homes from the department’s budget, the proportion of grant paid by the Department for Communities for new social housing starts will decrease.

The grant provided to housing associations to enable it to start building a new social home will on average reduce from 54% of the total cost to 46%.

Mr Lyons also announced reviews of this grant and the design standards to which new social homes are built.

“Given the challenging financial context, I have made it clear that we must take an innovative approach to the funding of social homes,” he said.

“I remain committed to bringing forward proposals on how we can build more homes with the budget available.

“These changes will achieve better value and more social homes for those who need them from the budget that my department provides towards new social housing, a budget of over £177.5 million in this financial year.”

Mr Lyons suggested the use of Financial Transaction Capital (FTC) mechanisms could enable housing associations to access finance at lower cost.

Proposals for the use of government land for building are also under consideration.

“Achieving the Programme for Government target of 5,850 social housing starts within this mandate will be extremely challenging given the constrained budget. Changes must be made, we must achieve more for less,” the minister said.

“I am grateful to the housing associations for working in partnership with my department and the Housing Executive to deliver the new build programme. I am confident that housing associations will continue to meet these challenging targets and to deliver for those most in need.”

However, the official Opposition at Stormont queried the move.

SDLP housing spokesperson Mark Durkan claimed Mr Lyons has “utterly failed to articulate how this will lead to the construction of more social homes”.

“Yet again, we are seeing an Executive minister off on a solo run, convinced they know best despite warnings that this decision could lead to projects collapsing altogether,” he said.

“This news is particularly disappointing given the lack of progress in empowering the Housing Executive to build the social homes we need. In stark contrast to an Executive that is missing the housing target set out in its own Programme for Government, housing associations are delivering homes in an extremely difficult climate.

“It’s hard to see how cutting their funding will achieve anything other than fewer homes being built.”

He added: “This cut will also impact the ability of housing associations to maintain existing properties and could lead to a situation where homes become inhabitable due to a lack of investment. This is the last thing we want to see with our social housing stock under such pressure.

“We are in the middle of a housing crisis that is only getting worse and interventions like this aren’t going to fix it.

“Ultimately, the Executive and the communities minister will be judged on their response to this crisis and they have utterly failed so far.”