Communities minister considers refocusing £19bn flagship housing policy to achieve wider regeneration goals.
Communities minister David Miliband is considering scrapping the Decent Homes standard and replacing it with a wider benchmark, in what would be a major policy shift.
Building has learned that Miliband and his housing deputy Yvette Cooper are thinking of replacing the standard, designed to bring all of England's social housing up to scratch by 2010, because it does not focus resources on the wider regeneration of an area.
A working party on the issue set up by Pricewaterhouse Coopers is proposing that councils be free to spend their housing funds on upgrading entire estates. Such a move would be a break with the way council housing has been funded for decades, and would give councils greater leeway in the way they carry out redevelopments.
The government is concerned that most of the money has been spent on inserting high-quality kitchens and bathrooms into failing estates.
There is some doubt that the government will meet the existing Decent Homes target in the time remaining. It is thought that by 2010 the most difficult 10% of homes to bring up to the standard will still not have been upgraded.
Miliband is keen that the money be spent instead on creating mixed tenure neighbourhoods in which private housing is used to break up concentrations of social housing.
Changing the local authority housing funding regime would bring housing policy more into line with the way the Housing Corporation funds its development programme, and may herald a closer working relationship with English Partnerships.
The corporation's forward strategy will outline its own proposals for a Decent Places standard.
The quango's £50m northern housing challenge will encourage registered social landlords to submit bids not just for housing schemes but for any project that will improve the quality of life in the area in which they are working.
Northern authorities have been lobbying for more leeway over how they spend their money, arguing that many council dwellings have a limited life because many tenants want to own their own homes.
Lord Best, director of the Joseph Rowntree Foundation, said: "Miliband is interested in mixed communities. He has been a convert to the idea that old communities will become improved and more sustainable if there is a mix of people there."