Annex 2
THE HOUSING CORPORATION'S NEW APPROACH TO
INVESTMENT
INVESTMENT OBJECTIVES
Every year the Housing Corporation allocates
public money to produce housing association homes. The money comes
from central Government, via the Department of the Environment
Transport and Regions (DETR). Our investment of these resources
plays a major role in the delivery of the Government's housing
policies. Our key aim is to invest well so that our funding makes
a significant contribution to creating sustainable communities
and reducing social exclusion.
We have three national investment objectives,
which guide all investment decisions. These are:
1. to provide new affordable housing in areas
of economic and demographic growth;
2. to contribute to the regeneration of deprived
neighbourhoods;
3. continuing to fund the provision of new
supported housing.
A NEW APPROACH
TO INVESTMENT
FOR 200-2001.
This year the Corporation started to implement
a new approach to the way we make housing investment decisions.
In the past we used a formula (called the Housing Needs Index)
to decide how much and where we invest our resources. Each local
authority area was guaranteed a certain amount of investment,
based on the score they achieved from the Housing Needs Index.
This approach worked well for a number of years, when all areas
had a shortage of housing and similar problems. But it is no longer
relevant today.
THE NEW
METHOD
Our new approach is more strategic and less
mechanistic. It recognises that the issues and challenges faced
both between and within the regions of England vary enormously
and that the solutions to these challenges have to be devised
at a regional and local level—not by a national formula.
It involves:
1. Establishing a clear view of regional
and local housing requirements, which form the basis of our investment
decisions. This is done by developing Regional Housing Statements,
which we produce in conjunction with regional Government Offices
and in consultation with regional stakeholders. The Statements,
spanning three to five years, provide a regional overview, highlighting
key housing issues in each region and identifying priorities.
They also ensure we meet the principles of "joined-up government"
by taking account of the economic outlook for the region, demographic
projections and regional planning strategies. They are linked
to the work of the new Regional Development Agencies, for example.
2. Having established this view, clearly
setting out our funding priorities. Each of our Regional Offices
does this by publishing a Regional Investment Strategy which explains
where and how they intend to invest their money over the coming
period. These enable housing associations to make proposals for
funding that are relevant to local and regional circumstances.
3. Fully accounting for our decisions, once
made. We do this by publishing details in documents called Regional
Allocation Statements. They explain how and why decisions were
taken, to ensure that the process is transparent.
This approach is being implemented incrementally,
over a three year period, to ensure that regional stakeholders
are properly consulted before full implementation and to allow
time to develop robust Regional Housing Statements. This year,
the degree to which our Regional Offices moved away from the old
approach to investment varied, depending on the level of support
they were given by local stakeholders.
THE IMPACT
OF THE
NEW APPROACH
IN 2000-2001
We are pleased with the way that the strategic
approach has played this year, making a significant difference
to the programme that we have been able to put together. For example:
1. We have been able to meet our three national
investment objectives (see above), by tailoring our investment
to closely meet regional and local needs. This has meant funding
new housing only in areas where there is continuing demand and
supporting regeneration and renewal in other areas.
2. We have been able to encourage joint-working
across local authority boundaries by funding a number of projects
which will benefit more than one local authority and in some cases
are a county priority.
3. We have funded many projects which recognise
the need for "joined-up government" by linking to other
essential services/policy objectives—improving health, for
example.
4. We have been able to quickly respond to
a number of Government initiatives. For example:
we are funding thirteen projects which will
cater for teenage mothers. A number of these projects will be
used as pilot schemes by the Department of Health Teenage Pregnancy
Unit.
At least 10 per cent of our rent programme will
be "Egan compliant". This means the projects will adopt
procurement and construction methods recommended by Egan's Construction
Task Force to improve the construction industry and make it more
efficient.
FUTURE PLANS
During the coming year we will continue to work
with Government Offices to develop the Regional Housing Statements,
making them more robust, so that we can move further from the
Housing Needs Index mechanism for the 2001-2002 bidding round.
This will be done in consultation with regional stakeholders,
including the new Regional Assemblies to ensure that our Statements
properly reflect regional priorities. We will also be introducing
a number of internal measures—like Quality Assurance which
will ensure correct procedures are followed and will evaluate
the outcomes from our investment—to make sure that decisions
based on our strategic approach are both sound and transparent.
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