AN IMMEDIATE £8.1m cut to a flagship scheme to revive the housing market in struggling parts of Merseyside could land it in “trouble”, the government was warned yesterday.
Ministers faced questions after suddenly slashing the budget of the NewHeartlands “housing market renewal” scheme and 10 similar projects in other towns and cities.
NewHeartlands aims to rebuild neighbourhoods covering 130,000 homes across Liverpool, Sefton and Wirral, alongside improvements to public transport, health facilities, policing and the environment.
Now it must decide how to hack 17.5% off its budget in 2010-11 – part of £6.2bn overall spending cuts – which will reduce funding from £46.9m to £38.8m.
The alarm was raised in the Lords yesterday by Lord Greaves, who suggested the move might point to a premature winding-down of the schemes before their work was completed.
The Liberal Democrat peer, who is involved with a project in East Lancashire, told the Daily Post: “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.”
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, replying in the Lords, Baroness Hanham, a local government minister, insisted: “I don’t anticipate there will be much drawing back on the ground as a result.”
In a statement, Brendan Nevin, the managing director of NewHeartlands on Merseyside, said the organisation was discussing how to implement the cuts with its local authority partners.
He added: “Underpinning these discussions is a desire and commitment to build on the progress we have made since 2003 and to deliver on the promises we have made to people living in some of the most disadvantaged neighbourhoods in the UK.”
NewHeartlands has worked hard to bounce back from early criticism that it bulldozed too many homes – instead of renovating them – and failed to listen carefully to residents’ wishes.
The National Audit Office was among critics of the decision to bulldoze hundreds of red-brick terraced houses in the Welsh Streets, in Dingle, including Ringo Starr's childhood home on Madryn Street.
Its report found the HMR neighbourhoods had succeeded in narrowing the house-price gap with surrounding areas, but it was “unclear” whether the programme itself was the cause.
