Budget slash fears for home renewal project

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.