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No 10 denies 'housing cash row' Council house cash diversion fear
(19 minutes later)
Downing Street has denied reports that there is no agreement over funding for Gordon Brown's plan to build an extra 20,000 affordable homes in two years. Money for improving existing council houses must not be diverted to pay for 20,000 new homes promised by Gordon Brown, a Labour MP has warned.
Ministers will later set out how the government plans to pay for a £1.5bn boost in housing spending in England. Austin Mitchell, who chairs the all-party group on council housing, spoke out amid controversy over how £1.5bn building programme would be funded.
Half of the money is expected to come from the department for communities (DCLG) and the other half from underspends in other departments. The Department for Communities and Local Government (DCLG) has been told to find half of the cost.
The Times reported the DCLG had refused to accept it would foot half the bill. It has refused to rule out taking some from its Decent Homes Initiative.
But a Downing Street spokesman described the reports as "simply untrue" and said there was agreement. Underspends in other Whitehall departments are to be used to pay for the rest of the cost of building the new homes, which was a key part of a raft of new policies announced on Monday, seen as an attempt to relaunch the government.
The Times reported the DCLG had refused to accept it would foot half the bill - but Downing Street has said reports of a row over where the money will come from are "simply untrue" and there was an agreement.
Under spendingUnder spending
But he said the DCLG had still to finalise the details of how this money was to be "re-prioritised" from within its budget. But a spokesman said the DCLG had still to finalise the details of how this money was to be "re-prioritised" from within its budget.
The DCLG also said that there was no disagreement with Downing Street, although no single programme had been identified for cuts to pay for the homes.The DCLG also said that there was no disagreement with Downing Street, although no single programme had been identified for cuts to pay for the homes.
A further £750m is due to come from under spending by other government departments, including health and the Home Office.A further £750m is due to come from under spending by other government departments, including health and the Home Office.
Schools Secretary Ed Balls confirmed that £200m was being transferred from his department's budget to the DCLG to help pay for new homes.Schools Secretary Ed Balls confirmed that £200m was being transferred from his department's budget to the DCLG to help pay for new homes.
Waiting lists
He told the BBC Radio 4 Today programme it would come from a £400m reserve set aside in case private firms did not want to engage in private finance initiatives during the recession.He told the BBC Radio 4 Today programme it would come from a £400m reserve set aside in case private firms did not want to engage in private finance initiatives during the recession.
He said it now appeared that would not be needed.He said it now appeared that would not be needed.
'Not happy'
A DCLG spokesman denied any rift with Number 10 over the funding but said it was not yet ready to announce exactly where it would find the money.
He refused to rule out diverting cash earmarked for bringing all council and social housing up to scratch under the Decent Homes initiative.
Mr Mitchell said: "I am not happy at all that money will be transferred.
"The Decent Homes Initiative is an effort to meet the manifesto commitment of 2005 to make every council house and social house a decent house.
"Councils have been so squeezed financially that they are not able to complete the programme.
"We are cutting off our nose to spite our face."
Right-to-buy
Details of the plans are due to be spelled out by housing minister John Healey, in a speech in Harrogate.Details of the plans are due to be spelled out by housing minister John Healey, in a speech in Harrogate.
He will explain to council leaders the outcome of a council housing finance review, which could see councils returning to large-scale home building.He will explain to council leaders the outcome of a council housing finance review, which could see councils returning to large-scale home building.
Mr Brown said the government was consulting on whether to allow councils to keep all the money raised from council house sales and rent.Mr Brown said the government was consulting on whether to allow councils to keep all the money raised from council house sales and rent.
He also proposed to let councils in England give local people more priority on housing waiting lists - which was seen as a response to the growth in a few traditional Labour areas of BNP support.He also proposed to let councils in England give local people more priority on housing waiting lists - which was seen as a response to the growth in a few traditional Labour areas of BNP support.
The National Housing Federation, which represents housing associations in England, has welcomed the extra investment but pointed out only 4% of its properties were let to non-UK residents last year.The National Housing Federation, which represents housing associations in England, has welcomed the extra investment but pointed out only 4% of its properties were let to non-UK residents last year.
Currently, council tenants' rent and proceeds from right-to-buy sales go into a national pot for redistribution.Currently, council tenants' rent and proceeds from right-to-buy sales go into a national pot for redistribution.
Some councils get money back while others have to pay a negative subsidy to the government. If they were to keep the money, councils may be able to build and repair more homes.Some councils get money back while others have to pay a negative subsidy to the government. If they were to keep the money, councils may be able to build and repair more homes.
In the past two decades, very few homes have been built by councils as housing associations have been the main providers of social housing.In the past two decades, very few homes have been built by councils as housing associations have been the main providers of social housing.
BBC local government correspondent John Andrew said he did not expect a return to the kind of mass council house building seen in the 1950s and 1960s.BBC local government correspondent John Andrew said he did not expect a return to the kind of mass council house building seen in the 1950s and 1960s.
But he said it would go some way to meeting the huge unmet demand for social housing as the number on housing waiting lists approaches five million.But he said it would go some way to meeting the huge unmet demand for social housing as the number on housing waiting lists approaches five million.