A signature Government housing scheme is in trouble, as ministers are uncertain how they intend to pay for it despite the policy being announced nearly three years ago, Sky News has learned.

In 2014, the Government announced a major new housing initiative - a big extension of Margaret Thatcher's famous Right to Buy.

For the first time, housing association tenants would be given the right to buy their own homes with significant discounts offered by the Government, just like council tenants were 30 years ago.

It would be the biggest shake-up of social housing for a generation and add a smattering of 1980s-style radicalism to a Government desperate to show it wasn't running on empty on housing.

As former prime minister David Cameron said in 2015: "1.3 million people given the chance to become homeowners. A promise made, a promise kept by this government."


Except the promise wasn't kept. Three years on, Sky News has seen figures which show the scheme has barely got off the ground.

Image: The Barrow family say they feel misled over the policy

Only 55 sales have been completed in a tiny number of pilot areas, with only a few hundred more in the pipeline. Consequently thousands of people are in limbo.

Rae and Jamie Barrow, from Billericay in Essex, are typical. They live in a housing association home and when they heard about the policy they voted Conservative twice to make sure it would be put into practice.

Rae, a mother of two children under the age of five, sums up the mood of most tenants: "I feel really misled and really sad about it.

"To be honest, I feel like I've let my children down by relying on what they said in their manifesto. We want to provide security for them, they need their home and yet we can't give it to them at the moment."

Jamie, a manager at a local gym, shares his wife's exasperation: "It's their future and we just can't afford to give it to them without Right to Buy."

Progress has been glacial and I'm told there was much discussion within Government about dropping the idea entirely - tellingly it wasn't in the 2017 Conservative manifesto.

Image: The policy was unveiled by David Cameron in 2014

The problem, as ever, was money. This extension was potentially hugely expensive because the Government (unlike council houses) doesn't own those homes - by definition, housing associations do.

Therefore the housing association in question would need to be compensated for the loss of the home and the discount they were forced to sell at.

The Government proposed to force councils to sell off their most expensive council houses to plug that gap.

But at a time when the UK already has a social housing crisis, many said that idea was mad.

The Government promised that those council homes would be replaced by new ones, but given the Government's record in replacing council homes which are sold off under the council version of the scheme (only one in eight), very few were convinced.

However, despite the will from some in Government to drop the idea, I'm told by a senior Government source that the policy will go ahead in some form.

PM pledges £2 billion boost for affordable homes

Post-Grenfell, the Government is keen to show it still has ideas on social housing.

But I'm told that the funding mechanism - selling off expensive council houses - will be scrapped, not least because it would have required legislation in the House of Commons and given the parliamentary arithmetic that would have been a major challenge.

That will come as a relief to many in local government who were worried about losing some of their remaining council houses but will be a massive headache to the Treasury.

Some estimate the cost at north of £3bn - just at a time when the Chancellor has new spending commitments coming out of his ears.

There is little idea in Government how it will be paid for yet and there is still room for tenants to be disappointed.

To bear down on costs the Government might tighten eligibility and make the scheme only available to people with a certain income or who have lived in their property for a long time.

I would expect further details, either way, in November's Budget.

For the Barrows, that can't come fast enough. They said: "We just want certainty. Yes or a no, we just want to know."

At a time when Brexit dominates all of our attention it's easy to forget how many policies have fallen by the wayside, nearly forgotten in Westminster.

But the Barrows and thousands like them haven't. The Conservative dream of home ownership was dangled in front of them. It's a hard dream to let go.