The Cambridgeshire and Peterborough Combined Authority has approved an additional £40 million fund for affordable housing, including its £100k Homes project.
The Combined Authority board agreed the fund by a majority on March 25 (Wednesday), with the caveat that economic disruption caused by the pandemic could see the money repurposed.
Under its founding devolution deal, the Combined Authority was given £170 million to fund affordable housing.
The newly agreed £40 million fund will add to that resource by taking money earmarked for other Combined Authority projects and loaning it to developers “to enable quicker delivery and more affordable housing”.
The plan is then for the money to be repaid to the Combined Authority in time to maintain its cash flow and for the original projects to still go ahead.
But questions were raised during the board meeting, with the leader of Cambridge City Council, Cllr Lewis Herbert, and the leader of South Cambridgeshire District Council, Cllr Bridget Smith, questioning the timing of the decision.
“I just think that the Combined Authority would be wise to start those projects at the other end of the crisis,” Cllr Herbert said.
He also argued the authority needs to know more about how its current loans will be repaid during the pandemic disruption, suggesting there may be other demands for funds if the county’s economy struggles.
Cllr Herbert said he was in favour of the strategy to use the reserves to facilitate more affordable housing and said he had argued for it for over two years.
But even so, he warned the decision was “hasty,” adding “I don’t see that agreeing any spend from the £40million, that there will be much happening for three or possibly six months.”
“My concern there is that we are not sure anyone is going to be building houses for an awful long time,” Cllr Smith said.
“Shouldn’t we be broadening (the fund) out as of now to start investing it in business recovering and business sustainability?”
The leader of Fenland District Council, Cllr Chris Boden, argued that the decision should be made.
“I feel very much that we need to plan for the future,” he said. “We have no idea how deep and how serious and how long this crisis is going to be.
“It may be at the shorter end of some of the expectations. It may be longer. If it is at the shorter end, by approving this now we will be able to move forward with our plans in the appropriate way.
“If it’s longer we can always reverse this decision.”
The mayor expressed agreement with the concerns raised but said “we have to be mindful that the world might not stop over the next three weeks, and that business might well be able to carry on in a strong position.
“I don’t want to commit unnecessarily to new decisions over the course of the next three to six months, but I think we also have to make sure and be mindful of the businesses we are working with and have been working with, also will be part of the recovery post-COVID-19.”
The Combined Authority’s head of finance, Jon Alsop, said agreeing the fund for affordable housing would not restrict it to affordable housing only.
He said it was “to support, for example, additional affordable housing schemes, but also to potentially support other service investments”.
“The original concept was to promote affordable housing,” he said. “But that’s not to say that it can’t be made for other investments in other Combined Authority priorities”.
The purpose of the fund as described by Combined Authority documents outlining the decision was to “approve the creation of a £40 million ‘top up’ fund to extend the availability of recycled funding to bring additional affordable housing to the market”.
Cllr Herbert abstained on the vote, with all other members voting in favour.
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