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Council housing budget cut by £220m

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Funding earmarked by the previous government for the Homes & Communities Agency is to be cut by £220m this year, ministers have announced

The figure represents a substantial chunk of the housing pot but it follows ministers originally warning the quango faced a £610m shortfall (LGC, 27 May).

Housing minister Grant Shapps subsequently said ministers would cover £140m of the £610m funding shortfall, which would have seen £470m cut (LGC, 1 July).

But the Department for Communities & Local Government has since confirmed the cuts will be in the region of £220m.

Mr Shapps said the announcement was “a real shot in the arm for housebuilders”. He added: “The previous Government had a black hole in their housing commitments hundreds of millions of pounds wide.

“In contrast we are in the business of offering genuine help the country can afford. Today’s cash is a real shot in the arm for housebuilders. It means that thousands of new affordable homes will now get built, protecting thousands of jobs in the process.”

But Labour’s shadow housing minister John healey disputed Mr Shapps’ claim. He said: “£220m was money set aside last year and agreed by the Treasury to start building new homes this year as part of a two year home-building plan.

“The new ministers have changed their minds and have stripped £450m away from housing this year. These are not cuts the Government has to make; they are cuts they want to make.”

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