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Government denies Conservative's claim of 'giving with one hand and taking away with the other' War of words as social housing cut by £800m

NEW GOVERNMENT figures show spending on social housing has been slashed by £800 million this year - months after Labour announced a similar amount would be spent on council houses.

Shadow Conservative construction minister Christopher Chope said the government was 'giving with one hand and taking away with the other'.

In a parliamentary answer, construction minister Nick Raynsford revealed that expenditure on

social housing in England fell by £763 million to £5 billion in the 12 months from April this year.

The news follows a government announcement of grants worth £784 million to allow councils to raise money to spend on social housing over the next two years.

Mr Chope told Construction News: 'Labour had led people to believe that the reduction in the housing budget under the Conservative government would be reversed, but now they have gone back on their pledge.'

House builders reacted warily to the figures. One builder, who asked not to be named, said: 'We have heard a lot of talking but there is little firm activity from the government yet.'

A government spokesman confirmed that the capital receipts money was not included in the figures.

He said Labour had inherited the budgets set by the former Conservative administration and was 'committed to the previous spend-ing plans'.

Transport union TGWU construction secretary George Henderson said he would be 'seeking an explanation' from government ministers at a meeting set for the New Year.

Also Mr Henderson has written to housing minister Hilary Armstrong voicing concerns that 'thousands' of builders working for council Direct Labour Organisations could lose their jobs if more council houses are transferred into private hands.

National housing agency Scottish Homes is working with the government to encourage more house-building.

Measures published in new guidance include redirecting resources to key areas to attract private and public funding and devising a revised policy to provide housing in support of community care.