Councils angered by 'housing cut'

The government intends to find £1.5bn for homebuilding

Councils across London have criticised a government decision to cut home improvement funding to pay for new homes to be built.

The Department for Communities and Local Government (DCLG) has proposed to "switch" the use of £600m promised to UK councils to spruce up their housing.

Havering Council, which estimates it will lose £82m, said the decision was a "major slap in the face".

A DCLG spokesman called it "misleading" to say councils would lose out.

The £600m will go towards a £1.5bn fund announced by Prime Minister Gordon Brown to provide new housing.

Siphoning off vital funds to pay for the prime minister's latest pet plans is underhand and badly lets tenants down

Paul Burstow MP

Councillor Michael White, leader of Havering Council, said: "We were stunned to hear the government is planning to strip funding to pay for house-building.

"If this funding is taken away, thousands of families in Havering won't get the new windows, bathrooms and kitchens that they have been patiently waiting for."

He added: "Asking our tenants give up their hopes of decent homes is a major slap in the face."

Sutton Council expects to lose £112m to repair its properties.

Paul Burstow, Liberal Democrat MP for Sutton and Cheam, said: "The government has betrayed tenants with this disgraceful decision.

"Siphoning off vital funds to pay for the prime minister's latest pet plans is underhand and badly lets tenants down."

'Misleading argument'

He added: "This act will condemn tenants to live in homes that are not fit for the future."

Housing minister John Healey said: "The argument that regions will lose out from our proposal to switch money to meet our pledge to build thousands of extra homes is misleading.

"Regions could gain more than they lose by bidding for a share of the £1.5 billion pot announced in our housing pledge."

He added: "Local authorities need to seize the opportunity to get a slice of the £350m we've made available to build new council homes."