The Prime Minister wants English local councils to move fast to make the best use of Government funding for 2,000 new council houses. The 127 million pounds was announced on the day that the Audit Commission criticised councils for putting too much emphasis on building new homes rather than recognising the benefits of improving existing housing.

Mr. Brown announced the allocation of the money to 47 councils and said it was a key part of plans to continue to invest through the economic downturn. The money, he said, would boost the building industry as well as giving families energy efficient, cheap homes.

“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 house building industry,” he said.

The councils involved will have to match fund the money from Government, bringing the total investment to more than 250 million pounds and the Housing Minister, John Healey said: “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.”

Projects announced under the new funding include 129 homes for rent in Birmingham, 101 in Salford, homes for 277 people in Ealing where the focus will be on larger families and 61 new homes for elderly people in Gateshead.