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Tories to hand social housing grant to elected mayors

26 March 2010

The Tories are planning to funnel £3 bn a year of funding to build new social housing directly to elected mayors if they win the election, Building reported.

The Homes and Communities Agency (HCA) would be bypassed in areas with elected mayors, in a major shake-up which could eventually extend to all councils. The Tories have already said they would introduce 12 new city mayors early on in a new parliament

Senior Tory sources said that ultimately the idea was for all social housing funding to be taken away from the HCA and given directly to local authorities.

Tory shadow housing minister Grant Shapps confirmed that a Tory government would first give funding in London to mayor Boris Johnson, then repeat this for any other councils with directly elected mayors.

Shapps said: “We believe in local democracy and empowering people to grab hold of their futures.

That’s why we think it’s important to scrap the red tape and get the money to where it’s needed.

“In London there is an elected mayor with a huge public mandate, so it is hard to see why the [London] HCA board needs to include the mayor and the chief executive of the HCA. By cutting out the bureaucracy, we will ensure more of the money gets to where it is most needed.”

Shapps’ policy team has met with Sir Bob Kerslake, the HCA chief executive, to discuss the proposals and a team has been set up to work out how they will be put into practice.

If implemented, the plans will signal a big shift in social housing in the capital as London already receives the biggest share of social housing grant – £4bn in the past three years.

Rather than co-operating with one unelected quango, it will mean that housebuilders and housing associations wanting to receive grants will have to negotiate with local authorities in different areas, which may have different criteria and requirements.

Social housing grant currently comprises half the HCA’s £16bn three-year budget. Shapps has previously hit out at inefficiency in the HCA and hinted that the Tories would shrink its areas of responsibility, but has so far not published detailed plans.

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