Fears as homes cash put on hold

Just over 8m earmarked for councils in Yorkshire and the Humber to

spend on building 129 homes is also in doubt as the coalition government searches for spending cuts.

Meanwhile Hull and South Yorkshire are among the losers from a 50m reduction in funding for housing market renewal programmes designed at stimulating the market in a handful of troubled areas where demand for homes is particularly low.

The detail of the spending cuts emerged as Ministers consider how to meet Treasury demands to save 6.2bn this year.

Housing has become a key battleground between the coalition Government and the opposition, Labour accusing Ministers of "failing to protect" it from the axe. Ministers have responded by exposing a 780m black hole in the previous administration's spending plans.

A detailed briefing note released by the Government has revealed that millions of pounds for five developments in the region which received initial backing through the Kickstart scheme will be put on hold until after the Budget on June 22, when there will be more certainty about how much money is available. Kickstart is designed to provide grants and loans to private developers to get work going on stalled schemes.

The Homes and Communities Agency (HCA) has already decided to cut 50m from the Kickstart budget, raising fears several developers who had been expecting assistance will now miss out.

It includes 770,000 for developer Incommunities towards converting historic Menston Hall, near Bradford, into affordable housing of 30 two-bedroom flats.

Just over 1m earmarked for the Crag View development in Bradford by Lowry Homes is also affected, along with Express Park in Rotherham, Lakeside in Scunthorpe and Ferriby Rise in Grimsby.

Councils are also anxiously waiting to hear whether they will get 8.1m pledged before the election to build 129 homes across the region because legal agreements were not signed off before the election, and final decisions have also been postponed.

And the cuts to the Pathfinder Housing Renewal programme – whose effectiveness has been questioned by the National Audit Office in the past – are likely to hit Hull and South Yorkshire as the HCA implements cuts of 230m this year.

HCA chief executive Sir Bob Kerslake said: "This represents the HCA's contribution to Government saving on both programmes and efficiencies, and we will aim to implement these in a way that minimises the impact."

New Ministers have been highly critical of their predecessors since arriving at the Department of Communities and Local Government, which oversees housing.

However, Labour's Shadow Housing Minister John Healey has accused the Tory Ministerial team of turning its back on housing by announcing cuts.