Plans to revive council housing were attacked as a drop in the ocean after it emerged that an extra £100m announced by Alistair Darling would create just 900 homes.

Ministers are keen to see local authorities contribute to ambitious targets for new social housing to address a waiting list of 4.5m people – which is growing.

But the sector faces an uphill struggle to increase its output from the meagre 310 homes built last year by English councils. Local authorities have not built more than 500 homes in a year since 1995. Housing associations are now responsible for most new social accommodation in Britain.

Margaret Beckett, housing minister, said yesterday the £100m would mean 900 new homes over two years.

Financial Times