The government has confirmed that housing and regeneration group the Homes and Communities Agency (HCA) will have an additional £220M cut from its budget in the current financial year.
The budget cut follows the £230M in “savings” that the coalition government instructed the HCA to make in May this year.
While the HCA had been warned that an extra £610M could be withdrawn from its budget, the Treasury has now revealed that the agency will receive £390M of that cash - meaning a cut of £220M.
Former prime minister Gordon Brown had pledged the £610M as part his £1.5bn housing pledge to provide 20,000 extra affordable homes.
A Department for Communities and Local Government statement revealed the £390M will fund 4,500 social rented homes, more than 3,000 affordable homes and allow work to resume on 1,000 homes stalled by the recession.
Housing minister Grant Shapps - who said in June that he expected only £140M of the £610M pledged to the HCA to be honoured - said the extra cash was a “real shot in the arm for housebuilders”.
HCA chief executive Sir Bob Kerslake said: “We are pleased to have confirmation of the £390M and are working on how we can use it to maximise the impact for maintaining the supply of affordable housing and creating opportunity for communities.
“We can now firm up the position with our partners to create more certainty around schemes that have been on hold.”It also means that we are now in a position to both meet commitments across our entire funding programme as well as providing funding for some additional affordable housing schemes.”