The money will go to home improvement agencies which adapt homes to make them suitable for older people.

Speaking at the housing improvement agencies conference in Birmingham this week, junior housing minister Tony McNulty said the Office of the Deputy Prime Minister would invest an extra £5.2m over three years on top of the £8.5m it has already allocated.

As well as ODPM funding, the improvement agencies already receive £9.5m separately from the Department of Health.

Health minister Jacqui Smith said the government would also create a grant to expand community-based social care services.