Cuts fall on another £220m of HCA funding, school building scheme scrapped
The Homes and Communities Agency (HCA) is set to have its budget slashed by an extra £220m, adding to the £230m of immediate cuts announced on 25 May.
Meanwhile, the government has effectively called time on the previous government’s Building Schools for the Future Programme, having decided to end 719 school rebuilding projects (see video, below), saving £7.5bn in total.
Today, Treasury chief secretary Danny Alexander confirmed a further £1.5bn of spending cuts following the announcement of £6.2bn cuts earlier this year.
The Department for Communities and Local Government has had one quarter of its £780m quango “flexibility” budget for the HCA slashed. This comes after the government confirmed it was only prepared to commit to £560m of the money, which is drawn from underspend by government departments, to build 12,500 homes.
This confirmation means that all of HCA’s existing contractual commitments will be met.
Housing minister Grant Shapps said: “The previous government had a black hole in their housing commitments hundreds of millions of pounds wide. In contrast we are in the business of offering genuine help the country can afford.
“Today’s cash is a real shot in the arm for house builders. It means that thousands of new affordable homes will now get built, protecting thousands of jobs in the process.”
In a separate announcement, education secretary Michael Gove has confirmed that £7.5bn will be cut from its £55bn Building Schools for the Future (BSF) programme.
Under the revised proposals, 719 existing school projects will no longer be rebuilt or refurbished through BSF, saving a total of £7.5bn. Of these, nearly 180 schools are projected to be new build, over 319 to be remodelled or refurbished and 63 to be ICT-only.
A further 123 academy projects in development which have not reached financial close will be reviewed on a case-by-case basis.
Tim Byles, chief executive of the scheme’s delivery agency Partnerships for Schools, said: “The review of schools capital will help ensure that the way in which future spending on school buildings and facilities is delivered matches the new Government’s priorities.
“Projects that have proceeded to a considerable stage will be honoured, those that are just bidding are not being honored.
“There will be a significant impact on projects where building has begun, but have not yet reached financial close – those that have got passed it will go ahead, but those which haven’t will not go ahead.”
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