THE future of affordable housing in Petersfield looks bleak after the Government dropped a housing bombshell on the district council this week.

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

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

ÒIt is a bombshell in this very expensive part of the world,Ó she said. We 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.

The spokesperson said that local authorities had been consulted on the changes last summer. But Mrs Cartwright said: ÒIt is crazy, you cannot put all the affordable housing in one place.Ó

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.

But 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

One affordable housing scheme that now hangs in the balance is Ramshill in Petersfield. Eighty-one affordable homes were planned for the 276-house site but this figure may now be revised.

Mrs Cartwright said the government had agreed to honour schemes scheduled to be built in the next year providing they have been approved by February 28.

She confirmed that the early stages of the affordable housing scheme at Ramshill would be OK but said homes planned for the later stages would prove much more difficult to fund.

Forty affordable homes are set to be completed on the site by 2004/05 with a further 41 by 2006/07.

EHDCÕs head of housing, Julia Potter, said: ÒThirty-six homes at Ramshill have funding through the governmentÕs Challenge Fund but 45 homes have no funding.Ó

She confirmed that EHDC had intended to fund the remaining homes with money from the local authority social housing grant, at £3m per year.

ÒWe will still have a programme for next year but it will really take affect from 2004/05 because we will not have a programme from then on in,

ÒInstead of making decisions at a local level, they will be taken on a regional basis so you are then competing with other local authorities and other priorities,Ó she said.