Housing Minister Grant Shapps and Communities Minister Andrew Stunell have announced plans for the most radical reform of social housing in a generation, with a fundamental shift of power from Whitehall to councils and local housing associations.

The changes will affect all areas of social housing policy, giving councils more flexibility to use their social housing stock to the maximum effect and drive down waiting lists. Over the past 13 years the number of people on waiting lists has almost doubled to five million - caused, Ministers argue, by the current centrally-determined rules.

Ministers believe that the current rules to allocate social homes are unfair and, despite £17 billion of spending on social housing over the last 13 years, have left nearly twice as many people on waiting lists.

Proposals published will make the system fairer, giving councils the option to offer flexible tenancies and greater local discretion to decide allocations, so better use is made of this valuable national resource. The rules will strike a sensible balance between the needs of new and existing tenants, and ensure the support that social housing provides is focussed on the most vulnerable and those who need it most, for as long as they need it.

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Mr Shapps said councils will be given much greater flexibility to help homeless families find appropriate housing, and existing tenants who may be trapped in unsuitable accommodation, or unable to take up a job offer because they can't move. A quarter of a million social homes remain overcrowded, and more than 400,000 under-occupied.

Mr Shapps said: "For far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should. This out-of-date approach has seen waiting lists rocket and is unfair to people who genuinely need social homes. They trap existing tenants in poverty, often in homes that aren't suitable for them.

"So the current system is ripe for reform, and the changes we're bringing in will ensure that from now on our social housing helps as many people as possible. The new system will protect the most vulnerable in society, ensuring those in greatest housing need are given priority. It will also be more flexible, with councils and housing associations able to offer fixed tenancies that give people the helping hand they need, when they need it. But above all it will be fairer - councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants."

Mr Stunell said: "To have five million people stuck on social housing waiting lists is unacceptable - clearly this system is broken and needs a radical overhaul.

"We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet."

(CD)