HCA cuts £230m and freezes new spending

The move follows the announcement of £6.2 billion of cuts by the government earlier this week.

The HCA has been told to cut spending by £230 million as part of the Communities and Local Government department’s £780 million budget reduction for 2010/11.

It is taking £100 million from the national affordable housing programme, £50 million from Kickstart round two, £30 million from its Gypsy and Traveller programme, and £50 million from housing market renewal.

The NAHP money had not been allocated. Bids for Kickstart are at an advanced stage, with £214 million worth having gone through the due diligence process. Bids were in for the 2010/11 Gypsy and Traveller programme, but the current round has now been scrapped. Housing market renewal programme allocations announced in December will be reduced.

As well as making the immediate cuts, the HCA has suspended commitments worth hundreds of millions of pounds until after the new government’s emergency budget on 22 June.

These include £83 million allocated to councils through the local authority new build programme, uncommitted funds from the NAHP, and the Kickstart round two regeneration scheme. Around £550 million of bids were received for Kickstart two, and £214 million worth were due for approval.

Full lists of the affected Kickstart and local authority new build schemes are available.

Sir Bob Kerslake, chief executive of the 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.’

Stewart Baseley, chairman of the Home Builders Federation, said: ‘Cutting Kickstart money, that creates immediate benefits in terms of local jobs and for the wider economy is a cut on investment not waste. Public money invested through Kickstart pulled in many more times that in private sector investment – which will now be lost to the economy.’