Derry MLA Mark H Durkan has warned than cuts to Housing Association grants announced by Communities Minister Gordon Lyons will lead to fewer social homes being built across the north.

Mr Durkan, the SDLP Opposition Communities spokesperson, was reacting after Gordon Lyons announced a number of changes on Monday, which he said were designed to increase the delivery of new social homes.

Following a meeting with the NI Federation of Housing Associations (NIFHA) and representatives of its members, Minister Lyons has announced that the amount housing associations will receive to construct new social homes is being reduced from on average 54% to 46%.

The Department said the changes take account of construction costs, inflation, rent levels and interest rates at their current levels.

SDLP Foyle MLA Mark H Durkan. (Declan Roughan / Press Eye)

placeholder image — SDLP Foyle MLA Mark H Durkan. (Declan Roughan / Press Eye)

The Minister also announced reviews of the grant and the design standards to which new social homes are built.

Minister Lyons said: “Given the challenging financial context, I have made it clear that we must take an innovative approach to the funding of social homes. I remain committed to bringing forward proposals on how we can build more homes with the budget available.

“These changes will achieve better value and more social homes for those who need them from the budget that my Department provides towards new social housing, a budget of over £177.5 million in this financial year.”

The Minister also highlighted how the use of Financial Transaction Capital (FTC) mechanisms could enable housing associations to access finance at lower cost. Proposals for the use of government land for building are under consideration, and would reduce the cost of new social homes.

Minister Gordon Lyons pictured previously on the City Walls.

Minister Lyons continued: “Achieving the Programme for Government target of 5,850 social housing starts within this mandate will be extremely challenging given the constrained budget. Changes must be made; we must achieve more, for less.

“I am grateful to the Housing Associations for working in partnership with my Department and the Housing Executive to deliver the new build programme. I am confident that housing associations will continue to meet these challenging targets and to deliver for those most in need.”

Derry SDLP MLA Mr Durkan however said that a decrease in the grant paid to Housing Associations will result in fewer homes being built across the North, not more.

Mr Durkan claimed the Minister had “utterly failed to articulate” how the new plans “will lead to the construction of more social homes”.

"This news is particularly disappointing given the lack of progress in empowering the Housing Executive to build the social homes we need,” Mr Durkan said.

"In stark contrast to an Executive that is missing the housing target set out in its own Programme for Government, Housing Associations are delivering homes in an extremely difficult climate. It’s hard to see how cutting their funding will achieve anything other than fewer homes being built.

“This cut will also impact the ability of Housing Associations to maintain existing properties and could lead to a situation where homes become inhabitable due to a lack of investment. This is the last thing we want to see with our social housing stock under such pressure.

“We are in the middle of a housing crisis that is only getting worse and interventions like this aren’t going to fix it.”