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Budget slash fears for home renewal project
Reporter: Lobby correspondent
Date online: 21 June 2010
AN immediate £4.4million cut to a flagship scheme to revive the housing market in struggling parts of Oldham could land it in trouble, the Government has been warned.
Ministers faced questions after suddenly slashing the budget of the Oldham/Rochdale Housing Market Renewal scheme and 10 similar projects in other towns and cities.
The HMR was created in 2002 to tackle problems of housing market failure, where prices had often collapsed and areas were facing widespread abandonment. The Oldham/Rochdale projects started in 2004, with 10 areas set to benefit. Six — Alt, Derker, Hathershaw/Fitton Hill, Primrose Bank, Sholver and Werneth are in Oldham.
Now it must decide how to hack 15.8 per cent off its budget in 2010-11 — part of £6.2bn overall spending cuts — which will reduce funding from £27.9 million to £23.5 million.
Lord Greaves raised his concerns in the House of Lords and suggested the move might cause a premature winding-down of the schemes before work was completed.
The Liberal Democrat peer said: “The housing renewal programmes were intended to last 15 years and are only halfway through.
“Some of the areas have recovered, but others have not recovered at all. If they are halfway through clearing an area and the money suddenly gets cut off then they could be in trouble.
“They will still have to improve the land before they can offer it to a private developer, or a housing association. They could end up wasting the money that’s gone in already.”
Oldham East and Saddleworth MP Phil Woolas said: “The pressure of housing in Oldham is as great as ever.
“It is a bad economic policy to cut capital expenditure which generates wealth.
“It will cause unemployment in the construction industry and will worsen the deficit in the long term not help it.”
Lord Greaves also criticised the Government’s insistence that the cut had to be made to each scheme’s capital funding pot, rather than its revenue stream — which might have allowed “bureaucracy” to be targeted.
But local government minister Baroness Hanham said: “I don’t anticipate there will be much drawing back on the ground as a result.”
Latest figures show that since the beginning of the scheme, £184 million has been invested between the 10 areas. There have been 323 new-builds, and 3,200 homes have been refurbished. A further 800 properties have been demolished.
Comments
The government needs to get a grip on housing as a whole. I mean some places have seen house prices rise between 5 to 6 per cent in the last year, where's this recession I keep hearing about? People in my age group (mid twenties) are looking at a future of renting property for life. because by the time myself and my partner are ready to buy, we won't be able to afford it, and we're not exactly low earners. The bank of England need to get a grip and raise interest rates for the good of the future
and so this budget should be cut too!
ombc jumped on this scheme far too quickly, they've cpo'd too many perfectly good properties that could have been renovated and just leveled them to the ground.
its the 1960's and 70's all over again, oldham council destroying whats left of communities to put new builds which the original residents cannot even afford.
what they should have done was within the deal is provide the home owners with a replacement home for the one they've lost.
"Oldham East and Saddleworth MP Phil Woolas said: “The pressure of housing in Oldham is as great as ever."
Yes Mr Woolas, and your party had five years to sort this mess out but no, your party opened the doors to the worlds waifs and strays increasing the problem with no end in sight.
Well said fedupoldhamer. We've been saying exactly the same from day one. On a brighter note, I'm still in need of a gardener, so when stalag Flint street is closed they can all apply in the usual way.....!!!!!!!!!!!!!!!!!!!!!
Oldham MP Phil Woolas said “It is a bad economic policy to cut capital expenditure which generates wealth. It will cause unemployment in the construction industry and will worsen the deficit in the long term not help it.”
Correct!
@JMTS. Do you really think Woolas is in a position to start criticisng on economic policy after the mess Labour left? The construction industry fell flat when the housing bubble burst.
This capital expenditure also creates debt which we cannot pay back. looking at the figures mentioned, there's an awful lot of fat to trim anyway.
Are all the workers British or will some of them go back home, thus not adding to unemployment figures?
Have Your Say
800 demolished and 322 new ones. No wonder there is a housing shortage ! The ones on Derker would have been fine if they'd refurbished them, like they did othere built at the same time.
By morgana60 @ 21/06/2010 13:39:06