The social housing budget in England is to be cut by more than 50% in the Spending Review, the BBC understands. Council housing "for life" will also be phased out, with the needs of new council tenants assessed over time. Despite the cuts, ministers are likely to set a target of building 150,000 affordable homes, changing the way councils charge rent to finance them.
Tenants will be charged nearer the going market rate, to release cash for the building programme. Ministers are expected to introduce a "flexible tenancy" for people who move into council housing for the first time. Tenants will be checked over a period of time to see if they still require help with housing from their local authority, the BBC has learned.
In August, Prime Minister David Cameron suggested tenants in England should get fixed-term contracts and be encouraged to move into the private housing sector if their finances improve. He said greater flexibility was required within the social housing system, allowing tenants to move to find work. But Lib Dem deputy leader Simon Hughes said his party was against the idea, which was not coalition policy.
Labour accused Mr Cameron of threatening the long-term stability people value from secure tenancy. At present, council tenants keep their property for life unless they breach their tenancy agreement, for example, by engaging in anti-social behaviour. They can also pass their homes onto their children.
Housing Minister Grant Shapps said Mr Cameron was simply "opening up the debate" and any changes - such as preventing homes to be transferred to a second generation - would not affect any existing council or housing association tenants. Mr Shapps also said he hoped to legislate later this year to create a National Home Swap Scheme, which would allow people in unsuitable accommodation - such as a pensioner who wants to move to a smaller home - to swap for something more suitable.
There are currently some eight million tenants in social housing in England. More than 250,000 households live in overcrowded conditions while a further 430,000 are unable to easily downsize from larger properties they no longer need. Last month, Work and Pensions Secretary Iain Duncan Smith suggested social housing tenants could be given incentives to relocate where there are jobs - prompting accusations from Labour that he was resurrecting a "profoundly unfair" 1980s Conservative call to the unemployed to "get on your bikes".
