Updated: PLANS to build 21 new council houses in York could become the latest casualty of Government spending cuts.

York MP Hugh Bayley has reacted with anger to an announcement by the Government that the proposed development of nine two-bedroom council homes and 12 three-bedroom council homes in Lilbourne Drive, Clifton, has been put on a list of projects likely to be scrapped.

He said he had written to Grant Shapps, the Minister of State for Housing, urging him not to withdraw the £1.25 million grant secured by City of York Council in January under the Labour Government.

This grant was to be match-funded by the council, providing enough money to build York’s first wave of new council houses for more than 20 years.

Mr Bayley said he was “bitterly disappointed”. He said: “Twenty-one York families will miss out on badly-needed housing as a result of this decision.

“I receive letters in my office every day from constituents who cannot afford to buy a home and need affordable housing to rent. “I lobbied for more family housing for York and I was pleased when the Labour Government announced £1.25 million would be provided for new council housing in York.

“This funding is important because it provides much-needed family housing for local people, and the development would create jobs for construction workers and help to strengthen the economic recovery.”

Coun Tracey Simpson-Laing, the council’s Labour spokesperson for housing, health and adult social services, said: “This decision will leave more families overstretching themselves to pay high rents and continuing to live in cramped and unsuitable properties that affect the family’s health and children’s educational attainment.”

Paul Landais-Stamp, the council’s housing strategy manager, confirmed the £1.25 million grant from the Government’s Local Authority Challenge Fund had been cut.

However, he said the council was in discussion with the Homes and Communities Agency to secure the funding from its affordable housing development programme.

He said they were confident of obtaining this funding and were therefore continuing to draw up a planning application, which was due to be submitted later this week.

Coun Simpson-Laing said: “I am glad the council officers have faith in the coalition Government to provide funding, but after the mess-up with the building schools fund, can they be trusted?”

Mr Bayley said he wished the council success in the discussions.