These credit crunch descriptors come to mind when trying to describe the potential impact of the Government鈥檚 seeming intent to cut the amount tenants will have to pay in rent next year. With experts suggesting that the retail price index will fall below minus 2% in September, the month when rent is set for the next year, housing associations, in particular, are warning of grim repercussions in linking social housing rent to inflation; with predictions that their income alone may fall by at least 拢260 million next year.

So what is Gordon Brown thinking? Offer the affordable housing sector a 拢1.5bn boost to provide much needed new homes one day (despite controversial reallocation of resources from a mix of budgets) and then reducing its annual capacity by hundreds of millions the next.

Social landlords are already struggling to cope with the Treasury鈥檚 creative accounting, some - especially ALMOs and transfer organisations - having to delay investment programmes and renege on promises to tenants. What鈥檚 wrong with simply 鈥渇reezing鈥� rents? Clearly the savings on housing benefit are far too attractive. But whilst the Treasury continues to rob Peter to pay Paul, many an executive in the sector will be scratching their heads on just how to make the books balance. Serious efficiency measures must result or will those developing new homes simply give up and stop playing this funding lottery?

Graham Kean is Head of Public at Consultants EC Harris.