BARNET's stuttering regeneration projects could be worse off as a result of a much heralded Government scheme to boost affordable housing.

The borough has lost £2.6 million that would have built roads, drains and other infrastructure to help realise the schemes after the Government “reprioritised” its grants.

The move is part of a Department for Communities and Local Government plan to pump £1.5 billion into affordable housing projects that have stalled as a result of the recession.

The construction of thousands of homes in Barnet has been delayed due to the recession and infrastructure problems, but the borough will still lose out.

Councillor Mike Freer, the leader of the council, said: “This decision is incredibly unhelpful at a time when Barnet is battling to get regeneration underway despite the recession.

“West Hendon housing regeneration desperately needs an injection from the growth fund and Barnet Council had provisionally allocated £4m to kick-start the project.

“What’s more, delays on other funding from the Homes and Communities Agency could potentially stall this key project further.”

Barnet had been allocated £13.7 million to build infrastructure that could galvanise housing projects and has already drawn £7.7 million of it.

Last week the Government wrote to Mr Freer to inform him that the last phase of the funding would be reduced from £6 million to £3.4 million.

The money will now be targeted elsewhere as part of the Government's £1.5 billion plan, announced in December, to build 20,000 home nationwide.

A spokeswoman for the Department for Communities and Local Government said that the money had been “reprioritised”.

“We're adapting to the economic climate and putting money where it's most needed,” she said. “In this case it's making sure we kickstart projects that have stalled.

“A lot of money is being made available to developers.”

She said the change could mean there is in fact more money available to authorities that have, on the face of it, lost out.

She added: "We have had to make some tough decisions across government about where we spend our money but we need to build more homes in Britain, and especially more homes available at rents people can afford."

The regeneration of West Hendon Estate, in particular, is in desperate need of an injection of capital.

But the Homes and Communities Agency, which will distribute the new grants, has delayed a decision on whether or not to approve a grant, has delayed its decision until September.