Wednesday, July 11, 2012
NAO Report on the Affordable Homes
The National Audit Office has
published a report on the Government's Affordable Homes
Programme, which deems the scheme to be "a success", with providers
exceeding the initial target by 26,000 homes.
Click here for the Full Report
Click here for the Executive Summary
The Report found the launch of the Programme by the Department
for Communities and Local Government and the Homes and Communities
Agency to be a success, with providers committing themselves to
building some 80,000 homes for the £1.8 billion of government
investment, compared to the initial target of 56,000.
However, key risks remain. Nearly a fifth of contracts with
housing providers remain to be signed; more than half of the
planned homes are not currently due to be delivered until the final
year of the Programme; and some providers are concerned that they
may not be able to charge rents at the levels they originally
agreed with the Programme.
The development of the new funding model for affordable rent and
home ownership was led by the Department and the Homes and
Communities Agency. The new Programme will be delivered by housing
associations, local authorities and other housing providers, who
were able to bid for Programme funding during 2011.
The new model means the Department pays less grant per home than
under previous schemes (£20,000 compared with £60,000 under the
previous National Affordable Housing Programme), while housing
providers borrow more and can charge higher rents. The new scheme
represents a reduction of 60 per cent in average annual spending on
affordable homes over the four years of the Programme from 2011-12
to 2014-15, when compared to the three years up to March 2011.
The Programme will increase providers' financial exposure, with
the sector facing challenges in securing bank financing for capital
investment and over the cost of supporting both future and existing
Amyas Morse, Head of the National Audit Office, said today:
"The Affordable Homes Programme has made a good start, with
providers committing themselves to building some 24,000 more homes
than originally expected.
"There are key risks, however, including the fact that more
than half of the homes are planned for the final year, with no room
for slippage. The final judgment on the success of the Programme
will depend on how well these risks can be managed between now and