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Housing Minister John Healey today gave the green light for work to begin building over two thousand new council homes that will help create over five thousand jobs in the construction industry.

Despite the recession this is the biggest council house building programme for almost two decades. Forty seven councils, covering every region of the country, will receive a share of £127million Government funding to help build these homes. They will match funding bringing total investment to over £250million. Mr Healey said that construction will begin on the first sites before the end of the year and he will announce a second wave of projects in the autumn.

This major cash injection is part of the Prime Minister's £1.5 billion Housing Pledge announced in Building Britain's Future in June. This commitment to housing will help build the homes the country needs, help people into jobs and help the country through the recession. Today's funding comes on top of cash announced in July to get building work on hundreds of stalled housing developments back on track.

Eighty per cent of the new council homes announced today will be built to standards well above that required by building regulations helping to cut CO2 emissions and reduce energy bills for the families that live in them.

All bids were subject to tough testing. They had to represent value for money, help meet specific local housing needs and be able to begin construction before March 2010. Crucially only bids for the construction of new council homes for rent were eligible.

In total 51 councils submitted bids. Bids from four councils were considered not to represent value for money and the Minister has asked the Homes and Communities Agency (HCA) to work with these councils to strengthen their bids for consideration later this month or for resubmitting bids in round two.

Today's funding is on top of action Mr Healey has already announced to dismantle the current council housing finance system and to give councils more leeway to manage waiting lists. Together these will allow councils more freedom to better meet housing needs in their communities.

Prime Minister Gordon Brown said:

"Today's announcement means energy efficient, affordable homes for thousands of families and jobs in every part of the country for construction workers. This is a key part of the Government's plan to continue to invest through the downturn to boost our economy and to Build Britain's Future. We now need councils to move fast and make the best possible use of this investment, so that together we can meet local housing needs and support the housebuilding industry."

John Healey said:

"Today I am giving the green light for councils to start building over two thousand new council homes, backed by £127million Government cash. It means that, despite the tough economic climate, the biggest council house building programme for almost two decades will begin by the end of the year.

"We have committed to use the power of Government investment to help Britain through the recession. This boost for affordable housing will help build the homes we need and it's also a shot in the arm for the construction industry creating over five thousand jobs. And built to some of the toughest ever standards this is good for the environment and means lower fuel bills for the families who live in them.

"This cash injection, along with plans I have already announced to give councils greater control of their housing finances and more leeway in how they run their waiting lists, means councils are better placed than for decades to meet the housing needs of their communities."

Sir Bob Kerslake, Chief Executive of the HCA said:

"The reaction to this funding programme by local authorities has been outstanding and proves that councils are geared up, confident and enthusiastic about developing their own homes.  Local Authority New Build is another important stimulus to the housing market, empowering councils and allowing them to call the shots when it comes to local housing needs."

Successful first wave projects announced today include:

• Eight family homes will be built on a derelict site in Nottingham's Clifton estate. The Widecombe Lane site will boost local employment and give ten local apprentices on site training for their NVQ qualifications.
• 36 new homes will be built on Wood Street in Rotherham as the first stage of regeneration for the wider Dalton area.
• Ealing will build homes for 277 people, with a focus on larger family homes.  Seven large family houses will also be built on Thorpe Close in Croydon, on a site which previously suffered from fly tipping and vandalism.
• A total of 28 new homes will be built in Durham and a total of 61 new homes for elderly residents will be built in Gateshead.
• 101 high quality family homes will be built in Salford.
• The Lambourne Road scheme in Oxford will deliver 38 new affordable homes for 146 people, including many larger homes to meet the demand for family housing in the city.
• 129 homes for rent will be built at four sites across Birmingham to provide a range of family accommodation.

Notes for editors

The full list of successful sites is available from The Homes and Communities Agency (HCA). The HCA is the national housing and regeneration agency for England, with an annual investment budget of more than £5bn. The HCA was formed on 1 December.

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