Mayor diverts £75m from new homes to fund repairs

London mayor Boris Johnson is planning to use £75m from the capital’s budget for new social housing to refurbish the city’s substandard council stock – and to send the government a bill in two years’ time.

The move is part of a growing row over the government’s decision last month to divert money away from social housing repair and into a £1.5bn new homes package, which hit London councils particularly hard.

Richard Blakeway, the mayor’s housing director, said Johnson had directed the regional board of the Homes and Communities Agency to fund the Decent Homes programmes of seven arm’s length management organisations (Almos) by plundering the cash from next year’s new homes budgets.

Blakeway said he expected the money to be reimbursed by central government in future financial years. The government had promised that the funding for Almos had only been “deferred”, he added.

The mayor is considering whether to take legal action over the Decent Homes funding plan, which he claims was not consulted on.

Last month, John Healey, the housing minister, “re-profiled” £150m from the national Decent Homes budget as part of a £1.5bn investment in building 20,000 new homes. He said Almos that had not received a two-star quality rating from the Audit Commission would have to wait until the next comprehensive spending review before they could get their hands on funding.

A spokesperson for the communities department said: “London receives much more funding for housing than other regions and will receive extra funding (£200m) this year and next from the government investment through the housing pledge.”