The Housing Corporation has only allocated two-thirds of the money available under its pilot programme for developers because many of the bids were not good enough.

The corporation has distributed £140m from its fund of £200m for the New Partnerships in Affordable Housing Programme, the first to be opened up to the private sector.

First Base, Bovis, Bellway and Persimmon have become the first private firms to receive social housing grant under the scheme.

However, Jon Rouse, the corporation’s chief executive, said it had refused to hand out all the grant funding because of the poor quality of some bids.

He said: “We would have liked to have allocated the full £200m on offer but, first time out, we had too many bids that didn’t meet the standards that we’re now seeking to apply in our investment programmes. A lot of the non-RSLs have not really got their heads around the new requirements on planning.”

Rouse said some applications had been ruled out because they had already received planning permission and were ready to start on site, and others had been disqualified for seeking to use the programme to provide extra support for schemes that were subsidised through section 106 agreements.

He added that he hoped these problems would be ironed out by the time the corporation ruled on bids for its main National Affordable Housing programme, for which the pilot had been a dry run. Rouse added that the £60m of unallocated grant would be rolled over into the main programme, due to be announced in the spring.

A lot of the non-RSLs have not got their heads around planning requirements

Jon Rouse, Housing Corporation

But he said the corporation had secured better value for money from its grant allocations because of the involvement of the private sector. He said: “There’s no question that the non-RSLs have sharpened up the bidding process.”

He also denied reports that the corporation was heading for an underspend, noting that there were another three months to go before the end of the financial year.

A Bellway spokesperson said the company, which has launched a housing trust to develop shared ownership housing, would be dividing its grant among a number of schemes in the south of England.

Thirteen housing associations have also succeeded in securing funding under the programme. They are: Sanctuary Housing, Places for People, Home Group, Genesis Housing Group, Hyde Housing Association, Metropolitan Housing Trust, Wayfarer, Thames Valley Housing, the Guinness Trust, Orwell, Flagship Housing Group, Nene Housing Society and Manchester Methodist.