The head of a new government review into housing has previously advocated a £5bn cut in state funding for the sector, it emerged last night.
Natalie Elphicke, the founder of the charity Million Homes, Million Lives, will co-chair a report into the role of local authorities in housing supply. Mrs Elphicke, whose husband, Charlie, is a Conservative MP, authored a report for Policy Exchange in 2010, which proposed that housing associations could generate £30bn a year by raising money directly from pension funds and save £5bn in government grants.
Eric Pickles, the Local Government Secretary, and the Chief Secretary to the Treasury, Danny Alexander, announced on Friday that Mrs Elphicke and Keith House, the Liberal Democrat leader of Eastleigh Council, would jointly lead the independent review, which will aim to encourage City investors, insurers and pension funds to bankroll affordable housing.
Mrs Elphicke's 2010 Policy Exchange report concluded that reforming finances and operation of housing associations could free up £30bn of funding to build new homes over three years, at a rate of 100,000 a year. She also proposed there should be "no requirement for the government to continue to provide housing grants for development, saving the taxpayer at least £5bn a year".
The Labour MP Sheila Gilmore said: "If this signals the direction of travel for Tory housing policy, this is deeply worrying. With families suffering a cost-of-living crisis, we need more affordable family homes to be built.
"People are struggling to get on the housing ladder, which is why Labour has outlined plans for 200,000 homes a year to be built by 2020."