Emailed in by BobE, from Inside Housing: Two of the sector's largest banks are offering cheaper loans to housing associations after benefiting from government initiatives to boost lending. Lloyds and Royal Bank of Scotland have both taken up the Treasury's funding for lending scheme and passed on cheaper borrowing costs to the sector to offer more competitively priced finance... OK, stop right there. i) The government is the government. ii) Lloyds and RBS were given massive bail outs by the government, which now effectively underwrites and controls them. iii) Housing Associations are set up, financed and controlled by the government, either directly or via legislation telling them what they can or can't do and what tax breaks they get. They are not charities or truly private organisations. So instead of the government just building housing itself - or allowing local councils to do so, using borrowed money or otherwise - it is using taxpayers' money to lend to "banks" to lend back to "housing associations" to do the building for them. We then need overpaid civil servants at HM Treasury to monitor the lending to banks, overpaid regulators to oversee the banks, overpaid civil servants to oversee the Housing Associations and overpaid quangocrats to run the Housing Associations, who then outsource the building work to large corporates with their high paid Chief Executive Officers, who in turn sub-contract it all back out to Joe The Local Builder. Because, for some reason, this is seen as preferable to allowing councils to just get on with asking Joe The Local Builder directly.