ºÃÉ«ÏÈÉúTV

Housing minister John Healey today gave the go-ahead for construction of 2,000 council homes for rent, in the biggest local authority housebuilding programme in almost two decades.

The £377m programme, which covers 47 local councils, is expected to generate 5,000 jobs in the construction industry.

To help fund the new programme, central government will add £127m to the £250m provided by local authorities, as part of the prime minister's £1.5bn housing pledge made in June.

However, a report released by the Audit Commission released today criticises councils for focusing on new build rather than improving their existing housing stock.

Kerslake: "Local authority new build is another important stimulus to the housing market"

The public spending watchdog's new national report, ºÃÉ«ÏÈÉúTV Better Lives, claims that improving existing homes could be more socially, financially and environmentally beneficial than building new.

It says councils feel pressured into new build, with 94% of areas prioritising new-build and/or affordable housing targets in their local area agreements while less than one-third prioritised targets on existing housing stock.

Construction of the first homes in the new council housebuilding programme will begin before the end of the year, with a second wave of projects to be announced in the autumn.

Sir Bob Kerslake, chief executive of the Homes & Communities Agency, said of the programme: “Local authority new build is another important stimulus to the housing market, empowering councils and allowing them to call the shots when it comes to local housing needs."