Housing Minister John Healey announced 73 councils covering every region of England will share an extra £122.6 million, effectively doubling current funding for new council homes.
Councils will match this second round Government grant, bringing investment in this round to £246 million, and total public investment in the programme as a whole to over £500 million, to build more than 4,000 new council homes for 8,000 people.
The Housing Minister confirmed that the programme will provide many new family size homes and all dwellings will be highly energy efficient and add to the mixed make-up of local neighbourhoods.
For the first time, all councils receiving Government funds are required to offer apprenticeship and local job recruitment schemes.
Thirty-five of the 73 councils receiving funding in this second wave will extend their council house building work which is already underway after successful round one bids, while 38 councils receive this Government backing for the first time. Eighty-six councils bid for the second round of house building with projects totalling more than double the funds earmarked.
A new report calls on the Government to step in to help plug a black hole of billions of pounds in council housing debt built up since the Second World War.
The Local Government Information Unit (LGIU) said about £18 billion is owed in old loans for homes, some of which was spent on properties which have since been demolished.
The report, by LGIU and Southwark Council, urges the Government to adjust repayment terms to help authorities clear the debts. More than £3,000 is owed for every person living in Southwark alone.
Amelia Walker, author of the report, said:
"We were shocked to find that every man, woman and child in Southwark - as in many parts of the country - owes over £3,000 of council housing debt.
"It might have made sense to run council housing on the never-never when the economy was strong. But now we are in recession we need to let councils pay down this debt.
"The Government needs to agree to let councils do what needs to be done, not just for tenants but for everyone who is living with this debt burden."
Kim Humphreys, Southwark's executive member for housing, said:
"Authorities were being hamstrung by rules over the repayments. Getting more and better work done with less money is crucial for this Council.
"The Council has an investment programme of some £100 million a year, £70 million of which is directly spent on its housing and over £20 million on regeneration, which includes the replacement of poor housing.
"We would love to devote this money to renewing all our housing, once and for all. But we are under constant pressure from the Government to meet its artificial standards and we are hamstrung by Government rules on debt and housing finance. Give us the freedom to do what needs to be done - and we will all benefit."
A pilot scheme was launched to see if older people could stay in their own home for longer by unlocking some of the equity tied up in it.
The Joseph Rowntree Foundation is running the project with three councils to see if having access to extra money enabled people to buy additional services which would enable them to stay in their own home rather than move into care.
The programme is using a new equity release product, the Home Cash Plan being provided by Just Retirement, which has been designed for income for poor older people.
The product aims to address one of the main concerns that older people have about equity release, namely that unlocking money from their home may reduce their entitlement to benefits.
It does this by enabling people to unlock small amounts of as little as £5,000 in the first instance, followed by £2,000 each subsequent time, on demand, rather than at pre-determined dates.
Voluntary groups are also taking part in the pilot to ensure that people are receiving all the benefits they are entitled to.
Julia Unwin, Chief Executive of the Joseph Rowntree Foundation, said:
"Around a million older home owners in the UK have at least £100,000 in housing equity yet have such small incomes that they qualify for means-tested benefits, meaning they can not afford to pay for additional support at home such as gardening or shopping.
"Previous research has shown that most older people would prefer to be supported to stay at home rather than move into a care home.
"Our aim is to find a practical solution to enable these people to release the equity in their homes, without jeopardising their pension credit, so they can stay at home for longer."
Research carried out by the Group found that older people may need as little as £20 or £30 extra each week in order to pay for additional help in their home, but many cannot afford this due to their low incomes, often only £200 a week for a couple.
The pilot, which will run until the summer of 2011, is being carried out in the London boroughs of Islington and Kensington and Chelsea, and Maidstone.
Each council has been given a specific focus, such as looking at the health and well-being of people involved in the project, and whether equity release is a viable and sustainable option to help people stay in their homes for longer.