The Government has pulled millions of pounds that the Cambridgeshire and Peterborough Combined Authority (CAPCA) was expecting to provide affordable housing.
Luke Hall, appointed last September as Minister for Regional Growth and Local Government, has today written to Mayor James Palmer to tell him of the decision.
The letter confirms the Government view that the money allocated to date has not been spent properly.
The minister says he had concluded that “insufficient progress in delivery” was being made.
He said the “value for money being achieved is below our expectations.
“I will not be extending the time frame or continuing to fund the programme on its current basis.”
However, he held out an olive branch to providing continued support for the mayor’s housing programme.
Mr Hall said he remains committed to enabling investment in schemes that will deliver further affordable housing “at pace” in Cambridgeshire and Peterborough.
He promised his department would carry out further work on detailed considerations that could provide funding for affordable housing to be delivered by March 31, 2022.
Last year the Combined Authority said the government has withheld £15 million expected in the 2019/20 financial year for the affordable housing programme, and that a further £30 million for the current financial year, 2020/21, is yet to be received.
REACTION FROM AIDAN VAN de WEYER, LIB CANDIDATE FOR MAYOR OF CAMBRIDGESHIRE AND PETERBOROUGH
Aidan Van de Weyer, Liberal Democrat candidate for Mayor of Cambridgeshire and Peterborough, 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 than had been approved - and that residents were looking forward to - will have the rug pulled from under them.
“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.
“Palmer should have been focussing on getting the maximum benefit for our residents, not spending time on pet projects like the £100,000 houses, which were never going to contribute to solving the housing crisis.
“It is clear that the government simply do not trust Palmer to deliver on his promises or to spend tax payers’ money wisely.
“Palmer is the only metro mayor in the country 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.”
“Mayor Palmer is not just trying to spin the letter from the Minister condemning his management of the £100 million housing fund, he is turning upside down and inside out in an attempt to defend himself.
“It is wrong of Palmer to say that the government has ‘confirmed’ the March 2022 end date and the ‘release of funds’.
“The Minster said, ‘I will not be extending the timeframe or continuing to fund the programme on its current basis.’ No more time and no more money. Any further releasees of funding will only be allowed if government can be convinced about the benefits of specific schemes. Government is not permitting Palmer to make these decisions.
“The government ‘will, subject to further work on the details, consider’ releasing more money. This is the opposite of a confirmation.
“Palmer’s Tory colleagues in government are giving him a year to mend his ways, but they are not foolish enough to trust him with any cash in the meantime.”
BACKGROUND
Earlier this year commitments made to provide over £10 million to help deliver 249 new affordable homes were suspended by CAPCA because the government was withholding funds.
CAPCA stressed at the time that it still expected the projects to go ahead on their original timetables and without delays.
It promised further government funding was expected “imminently” and that the suspension is only a “backup”.
The government committed £100 million to CAPCA to help deliver 2,000 new affordable homes over five years, as part of the 2017 devolution deal.
But payments are received subject to regular reviews by the Ministry of Housing, Communities and Local Government.
And today’s letter from Mr Hall is not what Mayor Palmer was expecting.
STATEMENT FROM DR NIK JOHNSON, LABOUR'S MAYORAL CANDIDATE FOR THE PETERBOROUGH AND CAMBRIDGESHIRE COMBINED AUTHORITY
Nik Johnson, Labour’s mayoral candidate for the Peterborough and Cambridgeshire Combined Authority, 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."
“This matter needs to be investigated with full transparency involving co-operation across all the communities and councils in Cambridgeshire and Peterborough.
“ It is time for change and time for a new mayor who will deliver the affordable and social housing that Peterborough and Cambridgeshire so badly need.
“If elected in May I am willing to do business collaboratively for the benefit of all ,building relationships and working with central government to sort out the disarray and huge disappointment of Mayor Palmer's plans , ensuring we build the foundations of a sustainable, affordable, environmentally friendly social housing programme across the whole of the Cambridgeshire and Peterborough Combined Authority area ."
STATEMENT FROM JAMES PALMER, MAYOR OF CAMBRIDGESHIRE AND PETERBOROUGH COMBINED AUTHORITY.
It is clear that the current consensus to house building 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 months 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, the Ministry of Housing, Communities and Local Government (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 CPCA 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 four 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 CPCA 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.
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