THE future of affordable housing in Alton looks bleak after the government dropped a housing bombshell on the district council last week.

Hundreds of affordable homes in East Hampshire may not be built after it was revealed the government is axing local authority social housing grants in April.

Leader of East Hampshire District Council, Elizabeth Cartwright, branded the news, which will come as a huge blow to many on low incomes, as ÒcrazyÓ.

ÒIt is a bombshell in this very expensive part of the world,Õ she said. ÒWe knew this was likely to happen but we thought it would be tapered.Ó

Mrs Cartwright said the council was only made aware of this immediate change last week and was now working on short term plans to mitigate the situation.

Under the local authority social housing grant, EHDC was able to fund new housing association schemes and claim the money back from central government.

But from April 1 the scheme will be abolished.

Mrs Cartwright said: ÒWe can still give grants to housing associations but we will not get the money back.Ó

A spokesperson for the Office of the Deputy Prime Minister said the change would enable resources to be targeted at areas with greater housing needs.

She confirmed that the department had scrapped the old system because it was Òan archaic and unfair scheme that consistently underspentÓ and Ògave an unfair advantage to debt free local authoritiesÓ.

The government has also announced that Regional Housing Boards have been set up to advise on the strategic use of housing resources.

Under the proposals there will be £175m of transitional funding for 2003/04 to ensure that Òwell advanced, good quality schemes are able to go aheadÓ.

While the government has agreed to honour schemes scheduled to be built in the next year providing they have been approved by today (Friday), Mrs Cartwright said the change would mean less affordable homes for East Hampshire in the long term.

ÒThis has a serious effect. There is a limit to how much we can give and not get back,Ó she warned.

Drum HousingÕs director of housing care, Bjorn Howard, said his organisation was worried about this shift in control from local authorities to a regional level and by the speed of this change.

Housing development, he pointed out, was a long-term activity which required careful planning and, while those working in the social housing sector had expected this new ruling to come into effect in 2004 the announcement of radical changes from this April had thrown doubt over DrumÕs investment plans for the coming financial year.

While the hope is that DrumÕs plans to develop much-needed homes for local people will not be affected, the governmentÕs decision has resulted in uncertainty.

Mr Howard told The Herald: ÒThe overhaul of the funding of social housing was expected but we are concerned about the speed of its implementation. We want to see as much social housing development as possible but it is important that district councils do not lose their influence over housing policy at a local level.

ÒWe are confident that funding will still be available but concerned that it might be directed away from areas like East Hampshire to those that are perceived as having a greater need, such as urban and regeneration areas. These are important but so is the development of homes for local people in rural areas like East Hampshire.Ó