£1.5bn aimed at social housing fails to mask dramatic shortfall in affordable homes

The government has been forced to slash targets for new social housing, despite this week’s announcement that it was pumping £1.5bn into building 30,000 homes.

Gordon Brown announced on Monday that the government planned to build 110,000 homes over the next two years, 55,500 this year and 56,450 next. This is more than 10,000 fewer than the target of 70,000 a year by 2010/11 announced by then housing minister Yvette Cooper in 2007.

Although the government has previously stated that the number of homes funded was likely to fall as a result of the loss of cross-subsidy from private schemes and a weak funding market for developers, it has never admitted that it was going to miss its target.

The government said the shortfall would have been 10,000 affordable homes a year greater were it not for this week’s £1.5bn injection.

Michael Ankers, the chief executive of the Construction Products Association, said: “The government is going to miss its housing targets, despite this injection of extra money – albeit for understandable reasons.”

Richard Blakeway, housing director for the mayor of London, said he had been informed that completions in the capital for the period 2008-11 had been cut from 44,000 to 37,000 and the target for starts had been reduced from 66,000 to 28,000.

He said the communities department had asked the Homes and Communities Agency (HCA) to revise the targets across the country last month, leading to the capital’s revised figure.

Blakeway urged the prime minister to back Boris Johnson’s 50,000 affordable homes plan, instead of “saying one thing in public while privately chucking in the towel”.

Of the £1.5bn announced this week, £750m will be used to build 12,500 social homes through the National Affordable Housing Programme, and a further £500m will go to the Kickstart programme for unlocking stalled regeneration sites.

Sir Bob Kerslake, the HCA chief executive, said that the time restrictions that had prevented many developers bidding for the earlier round of the cash were being lifted.

Social housing: where the £1.5bn is going

£750m to deliver 12,500 new homes through registered social landlords, arm’s length management organisations and housebuilders£500m on top of the £400m announced in the Budget for the Kickstart scheme to unlock stalled sites, bringing 13,000 new homes of which 4,000 will be affordable and 9,000 for private sale.

£250m to deliver 3,000 more council homes through direct development on top of the £100m in the Budget 500-home pilot to partner with contractors on public land, with interest from Wates, Bouygues and Skanska