Affordable Housing Programme

MQT on 2014-07-23
Session date: 
July 23, 2014
Question By: 
Len Duvall
Labour Group
Asked Of: 
The Mayor


Was the 2015/18 Affordable Homes Programme undersubscribed when the bidding process closed on 10 March 2014?


Answer for Affordable Housing Programme

Answer for Affordable Housing Programme

Answered By: 
The Mayor

Boris Johnson (Mayor of London):  There was actually a very good response in the bidding round to what we were offering.  I think I am right in saying that almost £500 million has been allocated to 54 providers.  Partly as a result of that - and there are several other programmes obviously - we are on course to deliver 100,000 homes over two mayoral terms and I think I am right in saying 45,000 between 2015 and 2018.  If you take this current programme together with the Housing Bank and the Housing Zones, those are good numbers but, as we all know, they are not yet high enough. 


Len Duvall AM:  Have we allocated the full £1.25 billion capital funding that has been given to you by central Government?  Is that fully allocated now across all these various programmes?


Boris Johnson (Mayor of London):  I cannot give you that answer.  What I can tell you is that we have allocated the thick end of £500 million this week.  That is all I can tell you about the progress we are making on that, as a result of which, as I say, we are on target to deliver 45,000 between 2015 and 2018.


Len Duvall AM:  Mr Mayor, you said there was a good response.  How many housing associations did we turn down to bid against the programme?


Boris Johnson (Mayor of London):  I cannot give you the number we turned down.  I can tell you that the number that succeeded was 54.


Len Duvall AM:  There has been some speculation in the press that has not been completely rebutted by the GLA here, that a number of housing associations did not bid as part of this programme.  A number of housing associations have gone to the press and said, “If we went into this programme, tenancies would be doomed to fail”.  Traditional social housing tenants cannot afford the higher rents that you are forcing them to charge.  This was on the affordable rent element of your strategy and they have chosen not to bid.  That is why you say there was a good response.  That seems to imply to me that you had more people responding which you would think.  We are in a housing crisis.  Everyone would like a subsidy and all the rest of it.  We would have turned down a number because there is limited money to go around in terms of these schemes.


Boris Johnson (Mayor of London):  It is certainly the case that there was a big spread in the number of homes that the various organisations were offering to build.  Some were up at more than 2,000 homes; some were down at 200.  It would be fair to say we would like to see a greater scale of ambition from the housing associations.  We are making that point to them. 


I do think that the numbers are currently very encouraging.  London generally is building more affordable homes.  The key statistic: more affordable homes will be built this year than in any year since 1980.  More affordable homes will be built in London this year than in any financial year ‑‑


Len Duvall AM:  Is it this year or over this term, the period of this programme?


Boris Johnson (Mayor of London):  This financial year.


Len Duvall AM:  This is a target, is it not?  You are not meeting these targets.


Boris Johnson (Mayor of London):  More affordable homes.


Len Duvall AM:  Mr Mayor, I did a quick calculation, and the reason why I asked if you have allocated the full £1.25 billion this year from different programmes - and you have allocated it to various programmes - is that there seems to be a missing £100 million-odd that does not seem to be allocated to any of the schemes.  Is this because a number of housing associations have not bid for the scheme?


Boris Johnson (Mayor of London):  No.


Len Duvall AM:  Therefore, somewhere it is in the system and you should be able to provide this information to me?


Boris Johnson (Mayor of London):  Yes.  We should be able to get you it.  Perhaps the reason for the discrepancy is that our housing budgets are allocated across a range of schemes now, including the Housing Zones and the London Housing Bank, as well as the Mayor’s Housing Covenant.  We are using lots of ways to achieve the goal of building more homes in London.  Just so you know, more affordable homes are expected to be built in this financial year than in any year since 1980.


Len Duvall AM:  In that sense you do not believe there are any disincentives then, nor engagement with housing associations fora on this scheme, that everything is all right?


Boris Johnson (Mayor of London):  I understand where you are coming from and the response, as I say, has been very good.  I would just reassure everybody that I do think this model - whatever the criticisms may be made of it - is not 80% across the board.  As everybody knows, it is 65% across the market.  There is plenty of scope for rents lower than that and we are seeing good uptake by a great many - by 54 providers across London.


Len Duvall AM:  Having said that, Mr Mayor, and I listened very carefully to what you said, why are these housing experts and these substantial housing associations not choosing to bid and be part of your scheme?  Surely they should be biting off your hand in terms of this money and they are not.  They are walking away from you.  They are not playing with this.  This is not some ideological issue.  They are just saying it does not meet the needs of poorer tenants and that you are forcing them into a new poverty trap.


Boris Johnson (Mayor of London):  Well, I do not know ‑‑


Len Duvall AM:  That is what they are saying.  That is what they have said in Inside Out [television documentary]. --


Boris Johnson (Mayor of London):  ‑‑ if you look at the G15, the Notting Hill Housing Trust has had £59,313,000, Peabody’s £20 million, Network Housing £22 million, East Thames £16 million, Circle Anglia £14 million and so on.


Len Duvall AM:  A number of buffers are not there that we would expect to see.  Big players that you would expect to see that are active in building new homes are not choosing to sign up to your scheme.  Does that not cause you a concern?


Boris Johnson (Mayor of London):  As I say, we have seen very, very good uptake.  Insofar as you may have a point, Len, which I am not for a minute accepting you do, but insofar as there may be people who for one reason or another have not been as energetic as they might have been, then I would urge them to come forward and not sit on their surpluses and not sit on this cash and get building in London.  We are here to build and that is what we are doing.


Darren Johnson AM:  The Mayor’s Homes for London Board confirmed recently that you will be delivering 52,747 homes by March 2015.  That is short of your manifesto 55,000 target.  Are you disappointed?


Boris Johnson (Mayor of London):  We will not be short because we are going to deliver 55,000 by December 2015 and it will be a record 100,000 completions over two terms and there are more than 76,000 of them completed so far.


Darren Johnson AM:  You will be late rather than short?


Boris Johnson (Mayor of London):  We are going to deliver 55,000 homes by December 2015.  That is a massive achievement and people will have heard what I have had to say on the rate we are now building at.  It is not just the affordable homes, however.  If you look at what is happening across London, the cranes are up everywhere and we are leading in the building of new homes for Londoners and that is the best solution: get Londoners the chance of having some bricks and mortars of their own and get them a roof over their head.