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Government could build new homes

The Government could directly commission the construction of new homes if developers fail to meet the demand needed to address the housing crisis.

Treasury Chief Secretary Danny Alexander said the idea was being trialled at a former RAF base in Cambridgeshire and could lead to homes being built twice as fast as the more conventional route.

Mr Alexander, who claimed around 300,000 new homes a year were needed, said the shortfall in construction meant the Government had to "think radically" and consider using taxpayers' money.

"The message to the housebuilding sector would be simple: if you don't build them, we will," he said.

Launching the National Infrastructure Plan, which also includes details of £15 billion of road projects, £2.3 billion of flood defences and a range of energy programmes, Mr Alexander said the Government had to act to address the housing shortage.

He said £100 million was being made available for the new garden city at Ebbsfleet, ministers will back the development of a 13,000-home new town at Bicester, in Oxfordshire, and the extension of the London Overground to Barking Riverside will help unlock the construction of up to 11,000 properties.

The affordable homes programme will also be extended for a further two years, Mr Alexander said.

But in order to meet the demand for 300,000 new homes a year "requires us to think radically".

"An idea that I have been promoting is direct government commissioning of housing. Government - national or local - would take responsibility for ensuring the number of homes we need each year.

"The message to the housebuilding sector would be simple: if you don't build them, we will."

There will be a detailed review to examine the potential of direct government commissioning and the Homes and Communities Agency will lead on delivering up to 10,000 new properties at the former RAF base at Northstowe in Cambridgeshire to trial the model.

"Now it's just a disused RAF base but soon it will be a development of up to 10,000 homes thanks to the pioneering action this Government has taken in trialling the new delivery model," Mr Alexander said.

"This is the first time in a generation that the Government has owned land, led the development on it at this scale and considered commissioning homes directly."

The model would allow homes to be built quicker and give the state the ability to " ensure developers build the most appropriate type of houses and the right associated infrastructure".

Mr Alexander said: "We are examining in more detail the idea of direct commissioning as a solution for the whole country and piloting it on this enormously important site."

Asked whether the need to build more homes would require the development of greenfield sites, Mr Alexander said he did not "necessarily accept" that would be the case.

"That's something that would need to be worked through in delivering this," he said.

He said redeveloping public sector land, such as Northstowe, could help meet the demand: "We have released sites in this parliament for about 100,000 homes, we think. We want to see a much more ambitious approach in the next parliament.

"I think that is something that can really help to meet this agenda."

Meanwhile Treasury Commercial Secretary Lord Deighton said the compulsory purchase scheme could be changed, making it easier for people's homes to be bought to clear the way for major infrastructure projects.

He said: "We will be publishing a consultation paper at the next Budget to streamline and update the compulsory purchase regime to make it clearer, faster and fairer."

Other announcements included funding deals for m ore than 1,400 flood defence projects, which will receive a share of the £2.3 billion already earmarked for capital spending over the next six years to improve protection for 300,000 homes.

The spending on flood defences includes major investments in areas such as the Humber Estuary, where £80 million will be spent, and £196 million for a programme in the Thames Estuary.

Ministers are also committing to spend £15.5 million on flood defences in Somerset over the next six years, which they hope will benefit 7,000 properties, including £4.2 million on the Somerset Levels and Moors which were badly hit by flooding last winter.

The coalition also announced it would be starting "closer discussions" with a company bidding to build the world's first tidal lagoon energy plant, in Swansea Bay, to establish if the renewable power scheme is affordable and value for money for consumers.

Other projects announced as part of the plan include a deal with Toshiba, GDF Suez and NuGen to provide a guarantee to assist the financing of a new nuclear power plant at Moorside, near Sellafield, Cumbria.

Up to £50 million will be available between 2017 and 2020 to support innovation in manufacturing ultra-low emission vehicles, with £25 million coming from Government, which hopes the money will be match-funded by industry.

Funding for a number of rail projects is also being announced, including a new station at Chesterton, linked to Cambridge Science Park, and support to improve the resilience of the rail link to south west England which was badly damaged in the winter storms and floods.

Companies that own and operate electricity interconnectors, enabling the UK to tap into power supplies from other countries, will be allowed to bid for funding to ensure energy security and reduce bills, the Treasury said.

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