However, the Office of the Deputy Prime Minister confirmed that the grant would be abolished as expected on 1 April.
The news came after determined lobbying by the sector sought to secure concessions from the government, after it announced the end of local authority social housing grant in deputy prime minister John Prescott's Communities Plan on 5 February.
The announcement effectively gave the sector just seven weeks' notice.
The Office of the Deputy Prime Minister hopes the move will calm the furore that erupted in the wake of the Communities Plan.
Letters were fired off by the Local Government Association and the National Housing Federation, as well as the Chartered Institute of Housing and, this week, by the Northern Housing Consortium.
Richard McCarthy, chairman of the NHF and chief executive of the Peabody Trust, said: "It is a great result and a direct result of effective lobbying by the LGA and the NHF. It means that projects caught in limbo will be saved."
He added: "What we now need to ensure is that the government puts in place sufficient resources to more then replace the local authority social housing grant."
Housing professionals from across the sector welcomed the extra money, but wanted clarification as to where it had come from. An ODPM spokeswoman would only say it had come from "departmental resources".
Announcing the changes in the House of Commons – where the Liberal Democrats had earlier tabled a motion calling for the government to reinstate local authority social housing grant – junior housing minister Tony McNulty said: "It would be indefensible to retain the current arrangements … and we are also clear that there should be no hiatus in housing investment."
He added that the additional £110m for 2003/04 would result in securing £550m of housing investment – £50m up on the previous year. The Communities Plan allocated £380m over three years for transitional funding.
The new arrangements will mean:
- £100m extra for debt-free authorities, taking total transitional funding for 2003/04 to £275m
- the money will be allocated by the corporation direct to the RSL
- endebted authorities will have access to £11m to replace the lost interest from set-aside local authority social housing grant funding
- this £11m will secure the future of schemes worth £275m.
McNulty also revealed that local authorities would have until 30 June 2003 to submit schemes for transitional funding.
If this money was oversubscribed, the corporation would "prioritise schemes with the government offices in terms of their contribution to regional housing priorities".
Source
Housing Today
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