Government pulls plug on £45m funding for Cambridgeshire Mayor's 'flagship' affordable housing programme
Cambridgeshire looks set to miss out on millions of pounds previously agreed for affordable housing in the area.
On Thursday, the government said it would not continue to fund the £100 million affordable housing scheme agreed as part of the 2017 devolution deal – £45 million of which is still outstanding.
The minister for regional growth and local government, Luke Hall, notified the Cambridgeshire and Peterborough Combined Authority board of his decision in letter on Thursday.
The minister said: “As you know, my officials have been working with your officers to review progress on the £100m Cambridgeshire and Peterborough Affordable Housing Programme.
“I have concluded that the programme has made insufficient delivery progress and that the value for money being achieved is below our expectations. I will not be extending the timeframe or continuing to fund the programme on its current basis.
“However, rather than closing the programme at this point, I remain committed to enabling investment in schemes that will deliver further affordable housing, at pace, in Cambridgeshire and Peterborough.
“I have confirmed to Mayor Palmer that the Department will, subject to further work on the details, consider making further funding available to CPCA for the delivery of affordable housing by 31 March 2022.”
The combined authority’s £100 million affordable housing programme has been providing funds in grants or loans to third parties to help with the delivery of affordable housing.
The deal with government was for the combined authority to use the £100 million to help deliver 2,000 new affordable homes in the area over five years.
So far the combined authority says it has received £55 million from the government.
The stopping of any funding will not affect a separate £70 million affordable housing fund being paid by the government to Cambridge City Council to deliver 500 new council homes in the city.
The government’s decision will likely have significant political fall-out as the Conservative government has made the judgement that the Conservative-led combined authority and Conservative mayor James Palmer have not delivered as expected on the programme so far.
Labour MP Daniel Zeichner said: “This is a shambles. There is a desperate need for affordable housing in Cambridgeshire and Peterborough.
“This was one of the mayor’s flagship schemes but his incompetence means that families in need of an affordable place to call home will now suffer. Frankly it is time for new leadership.”
The Liberal Democrat candidate for the mayoral election on May 6 Aidan Van de Weyer said: “This is disastrous news for the people of Cambridgeshire and Peterborough.
“As a result of Palmer’s incompetence and arrogance, hundreds of desperately needed affordable houses will now not get built. The housing programme is now at an end and several schemes that had been approved – and that residents were looking forward to – will have the rug pulled from under them.”
Councillor Van de Weyer added: “The housing money devolved to the mayor was not new money, but was going to be invested by the government through Homes England into the area. So we are now actually worse off because of Palmer’s tenure as mayor than if he had never been elected.
“It is clear that the government simply do not trust Palmer to deliver on his promises or to spend tax payers’ money wisely,” he said. “Palmer is the only metro mayor in the county who has had money removed from him by government. He is a national embarrassment. He is dragging the people of Cambridgeshire and Peterborough down with him. He needs to be replaced.”
The Labour candidate for the mayoral election, Nik Johnson, described the news as 'devastating' and has called for an investigation.
He said: “I am hugely disappointed to hear this news and very concerned about the knock on effect for those residents of Peterborough and Cambridgeshire desperately in need of affordable homes.
“I can only commend the Conservative Minister Luke Hall for recognising what we locally have known for some time - that Mayor Palmer is a man who four years ago started with big promises but has failed to deliver ,whilst wasting time and money in the intervening period.
“Building thousands of new affordable homes across the area was one of his big pledges but today the Conservative Party nationally have acknowledged his failure to deliver on those pledges and no longer want to risk valuable taxpayers money."
Mr Palmer said: “The government has said very clearly that they will enable the combined authority to deliver existing schemes in the pipeline – so there will be money available.
“How much that is I don’t know, because we’ve got to sit down with them and discuss how much money we need in the short term”.
In a lengthy statement defending the “innovative solutions” his authority has attempted to put in place to provide affordable housing, the mayor highlighted that £40 million of the existing funds provided has been loaned out, and that the combined authority is expecting returns on those loans which can then be put toward further affordable homes.
He added: “The government have not made it easy for us to deliver on their programme. There was the seven month delay they created at the outset, which meant 142 homes could not be funded and our entire pipeline of projects was lost. There were repeated queries and clarifications, taking up officer time that could have been used on delivering homes. Finally, there has been the delay on releasing the final years’ funding and dispute over the end date”.
He said the government has committed to “the release of further funds to get as many affordable homes as possible started” by the devolution agreement timeline of March 2022.
A Combined Authority Spokesperson said: “At this stage it is difficult to determine exactly how much money the Combined Authority needs to complete its housing programme to March 2022 as the housing pipeline is live and changing. The £100million Affordable Housing Programme Update going to the housing committee on Monday (March 15) provides a good indication of where the programme is to date.”
The mayor’s full statement
The Conservative mayor and leader of the combined authority James Palmer said in a statement on Thursday: “It is clear that current consensus to house build is not working; we are still neither building the number of homes we need, nor doing so in a sustainable way.
“Backed by the Combined Authority Board, I have always been determined to find new and innovative ways to tackle this problem. That is why, rather than just give all the money away as grant as we were expected to, the Board approved a £40m Revolving fund out of the £100m Affordable Housing Programme the Government asked us to implement. This approach carries on delivering affordable homes in perpetuity with ever improving value for taxpayer money. The Government backed this approach, and have confirmed to me recently their willingness to look at innovative solutions and alternative methods of delivery.
“Since then, the Government have not made it easy for us to deliver on their Programme. There was the seven month delay they created at the outset, which meant 142 homes could not be funded and our entire pipeline of projects was lost. There were repeated queries and clarifications, taking up officer time that could have been used on delivering homes. Finally, there has been the delay on releasing the final years’ funding and dispute over the end date.
“I am glad therefore that as a result of our discussions, the Government has now confirmed the March 2022 end date for their housing programme, and the release of further funds to get as many affordable homes as possible started by then.
“However, given the impact of Covid-19, there has been an ever-tightening grip on how they want their money spent. They have now indicated that it must all be disbursed by 2022, including funds currently allocated to the Revolving Fund.
“It has become clear to me that in light of the toughening financial situation, MHCLG do not see their current programme as a chance to try alternative solutions, and are continuing with a short term focus on arbitrary targets and deadlines.
“I know the Combined Authority Board, and the people of Cambridgeshire and Peterborough, want us to do so something different, something better than current policy; just giving money away to housing associations will never be good value for money. It was also always the case that the innovations we’ve introduced in the last 4 years could only ever be proofs of concept in light of the scale of the problem we are trying to address.
“To that end, I will ask the Combineded Authority Board to agree to the steps necessary to complete this MHCLG Affordable Housing Programme, and to mandate me to continue the development of a housing delivery plan that works for Cambridgeshire and Peterborough. One based on innovative solutions, encouraging affordable ownership rather than expensive rents, and to a scale that will have a chance of building the homes we need in a sustainable way. I look forward to discussing this agenda with Government as we emerge from the pandemic.”