03.11.2009

Housing Minister John Healey today finalised a £450m funding package to kickstart work on over 150 stalled housing developments, getting work back on track and builders back on site.
Mr Healey said this cash injection to every region of the country is a rapid response to the recession, to help house-building at a time when the industry needs it most.
Workers will start returning to these mothballed sites within weeks – building over 11,100 homes, and creating or safeguarding around 9,500 jobs. Over 5,000 of these houses will be affordable homes for low cost sale or rent.
The Government has applied tough value for money tests for projects to receive Kickstart funding. The Minister today gave the green light to 115 schemes to receive a share of up to £388m. This takes total Government investment through the Kickstart programme to over £450m to deliver over 11,000 homes. It means that since June Mr Healey has approved the release of almost £1.5bn in Government help for house-building.
The flagship Kickstart programme offers rapid action in recession. House-building projects can take years to complete, but under Kickstart once cash has been confirmed builders can return to work within weeks.
Mr Healey is ready to run a second wave of Kickstart, with over £500m available. Developers continue to see the real help this can offer in tough times, which is why second wave bids have been received that could deliver up to 55,000 homes and around 2,000 apprenticeships.
To ensure the Government gets the most for every taxpayer’s pound, this funding comes with tough terms. Over two thirds of the funding is expected to be repaid, with less than a fifth consisting of direct grant to support developers and the rest used to fund affordable homes as part of the Kickstart programme. Only developers who have accepted a realistic current market price for their land have been eligible for this investment.
Today, John Healey finalised round one of the Kickstart programme, which started in July and short-listed 270 projects in line for funding.
Of the 270 schemes short-listed for funding in this round of the Kickstart programme, 152 projects have been approved.
Developers for 81 schemes withdrew their bids for Kickstart support at this time – with some citing improved market conditions and better access to private finance as one of their main reasons. Forty-six developers that have withdrawn from the first round of Kickstart are submitting bids for the second round.
But 35 schemes have not passed the tough tests and will not receive Kickstart funding – either because they did not offer value for money for taxpayers, or because the design of the development was not of a high enough quality. Some could not meet the tight timescale – a key requirement to ensure communities benefited from this cash injection as quickly as possible, when they need the help most.
John Healey said:
“This Kickstart cash is a rapid response to the recession, using the power of Government investment to support the country through the downturn. With this investment, we are creating jobs and helping build the homes people need.
“Kickstart funding comes with tough terms, and I expect much of this money to be repaid within five years. Some developers have failed our tough value for money test, but I’m also encouraged that others have withdrawn saying they no longer need help because market conditions are improving.
“But with over £500m Kickstart cash available in the second round, help is on hand for those who need it. And I expect all developers submitting bids to offer apprenticeship and local job opportunities for young people in our communities as part of their plans to get their stalled housing projects back on track.”
Chief executive of the HCA, Sir Bob Kerslake said:
“I am delighted that the HCA has been able to play such a major role in unlocking key housing schemes across the country.
“The due diligence process has been a thorough and challenging one for all involved but I am pleased that so many good schemes have been confirmed. We now look forward to completing the contracts and getting starts on site.”