Social housing grant to be axed

The government has been asked to urgently rethink its decision to abolish a vital housing grant that has produced 53,000 homes since 1996.

The Local Government Association (LGA) and National Housing Federation (NHF) have written to deputy prime minister John Prescott calling for an urgent meeting to discuss his department's decision to do away with the Local Authority Social Housing Grant (LASHG) by 1 April this year.  Around £1.3bn was expected to go into LASHG schemes over the next two years.

While the proposal to abolish LASHG was first mooted last August, until the recent publication of John Prescott's 'Communities Plan' there had been no further word on the matter since the consultation period concluded in October four months ago.

Paul Jenks, chair of the LGA Housing Executive, said: "No consideration appears to have been given to the consequences of abolition at such short notice, and some devastating effects are likely. At the very least, the abolition of LASHG should be deferred for a year to allow a properly planned mechanism for achieving the government's objectives in a sensible and co-ordinated fashion."

Richard McCarthy, chair of the NHF, feels the axing of the grant will send many schemes back to the drawing board. "Significant transitional funding arrangements must be made available to ensure that existing developments are not lost," he said.

A spokesman at the Office of the Deputy Prime Minister said that £175m of transitional funding is in place for 2003/04 to ensure that "all well advanced, good quality schemes will still go ahead".