A £400m fund announced by Theresa May to pay for replacing combustible cladding on up to 158 social housing high-rise buildings following the Grenfell Tower fire, means fewer affordable homes will be built in the coming years, it has emerged.



The government has admitted that the funds for the renovations are being taken from the Affordable Homes Programme.

Neither May nor the secretary of state for housing, James Brokenshire, mentioned that the money was coming from that budget when they announced the bailout last week, triggering widespread relief in the housing sector.

Across England more than 300 towers rising above 18 metres and clad in similar materials to those used on Grenfell have failed laboratory fire tests and about half are in the social housing sector. Social landlords had lobbied the government hard for the money, saying they could not otherwise afford the replacement work.

Uncertainty remains about what cladding materials should be used because the government has yet to confirm whether all combustible materials will be banned for cladding, although on Wednesday May said she was “minded” to do so.

The details of the funding for the scheme emerged in a written answer from the housing minister, Dominic Raab, following questioning from the shadow housing secretary, John Healey.

Raab said: “This does mean that fewer homes will be delivered in the short term.” But he claimed that £400m would be added to the next Affordable Homes Programme budget, which was not due to start until 2021-22.

The initial aim was to provide 225,000 units through the Affordable Homes Programme up to 2021. The government has not said how many fewer homes would be built.

Even if £150,000 were spent building every home it would mean a reduction in the new supply of affordable housing units of almost 2,700 over the period up to 2021-22.

Raab said: “The government will fully fund the removal and replacement of dangerous aluminium composite material cladding [used on Grenfell] on buildings owned by councils and housing associations, with costs estimated at £400m ... Our Affordable Homes Programme remains over £9bn, with £400m of that now available in 2021-22.

“This responds to calls from social landlords for longer term certainty of grant funding for new homes. The programme will still deliver the same number of homes, but this does mean that fewer homes will be delivered in the short term.”

He added: “We will announce more details shortly about how councils and housing associations can apply for funding, including conditions attached to the grant.”