London boroughs could be given more influence over affordable housing investment, in return for commitments on the delivery of affordable housing, the Mayor of London, Boris Johnson has announced.

A new pilot scheme - approved by the Homes and Communities Agency (HCA) London Board chaired by the Mayor - has been set up to explore what immediate steps can be taken to give London's councils greater control and flexibility over housing decisions.

The pilot will also explore a framework which could see boroughs agree to an indicative budget for housing investment from 2011 as part of the next public funding round.

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Croydon, Westminster and Hackney councils have been invited to take part in the pilot, starting from April 2010, as they represent a wide selection of the housing challenges in the capital, from over-crowding to major estate regeneration, and have all developed robust and ambitious investment plans working with the HCA.

The boroughs will spend the year-long pilot working with a steering group, chaired by the Mayor's Housing Advisor, Richard Blakeway and made up of representatives from several key agencies including London Councils, HCA, Housing Associations and Communities and Local Government, looking at what steps would be needed to create a London-wide delegated delivery programme.

Every borough will potentially be offered the opportunity to negotiate a delegated contract for the 2011 investment round.

Mr Johnson said: "We remain on track to deliver a remarkable number of affordable homes over the next few years but we must begin to look now at how we can keep this momentum going into and beyond 2011.

"London's councils have a hugely important part to play in helping us achieve the levels of affordable housing this city needs and they are once again leading the way with this superb new pilot."

(CD/BMcC)