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Housing Minister Grant Shapps and Homes and Communities Agency (HCA) Chief Executive Pat Ritchie today announced plans to transform the HCA into a smaller enabling body working for local communities on their priorities.

This is part of the Government's programme to make quangos more accountable to the public and cut their running costs. It represents the start of an ongoing process.

Today's statement follows a review of the role of the HCA as part of the Spending Review process. They will lead to a reduction in its running costs by half over two years, saving the taxpayer over £100m by 2014-15.

Key elements of the plans, which will be delivered within the CSR period, include:

• a 50 per cent reduction in HCA running costs from over £80m per year to around £40m per year
• reducing the number of HCA Directors from 12 to six, with the potential to reduce this further over time
• a reduction from 17 to four core HCA offices, with locations to be finalised as HCA work within the broader DCLG and public sector estate rationalisation programme.

Despite the very tight fiscal climate, the Government has demonstrated its strong commitment to housing and regeneration. £6.5bn will be invested in housing including over £2bn to make existing social homes decent; £4.5bn to fund new affordable homes, including the new Affordable Rent tenure; and a further £1.4bn invested in communities through the Regional Growth Fund, over the Spending Review period.

HCA is working in collaboration with the Department as the detailed design of these new programmes is worked up. Consultation with partners will get underway in earnest from the New Year. In addition, plans are being developed for the Agency to hand over its functions in London to the Mayor, and to take on the remaining responsibilities of the Tenant Services Authority, which is being abolished.

Grant Shapps said:

"We are committed to building more affordable homes and regenerating local communities. The HCA will play a vital role in delivering this radical agenda, but with a new working ethos of communities in charge, drawing on the expertise that the HCA has to help them achieve their priorities. The plans we are announcing today will enable local communities to do just that - while also saving the taxpayer over £100m.

"Like all areas of the public sector, the changes I am announcing today mark the start of a process, not the end. HCA will need to remain flexible to deal with new challenges that will continue to emerge in the coming months and years."

Pat Ritchie, HCA Chief Executive  said:

"Government has given the HCA an important role in meeting the housing and regeneration priorities of local authorities and communities, and in regulating the housing sector to command lender confidence and protect the taxpayer. We have therefore created a top structure with a strong local focus that will provide effective leadership and engagement with local partners while saving money. Further changes will flow from this top structure, maximising the potential of our expertise and investment to help local authorities achieve ambitions for their own areas."

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