Capital housing funds are to be dramatically cut with news in the Republic's Budget that the overall Environment and Local Government fund is to be reduced by 27%, a cut that will see almost €2.2 billion in 2010 reduced to just under €1.6 billion.

The largest cuts are to investment in infrastructure with the capital budget cut by more than half a billion to just over €1 billion.

New house construction - part of the capital housing fund - will bear the brunt of these cuts.

This means that the provision of social housing, local authority regeneration programmes and grants for elderly or disable people to adapt their homes, will be cut by more than one third from €880 million in 2010 to €520 million.

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The cuts weight heaviest in capital funding for the provision of new social housing which will more than halve next year from €550,500 in 2010 to just €247,000, reflecting the policy shift away from building to leasing houses for council tenants.

However, in an attempt to encourage more council tenants to buy their houses, the discount available under the tenant purchase scheme has been increased from a maximum of 30% to 45% for next year only.

The Environmental Protection Agency (EPA) is also having its funding cut more than a quarter - to just under €20 million - while funding for heritage organisations such as the National Parks and Wildlife Service, the Heritage Trust and the Heritage Council is down a total of 60% to €22.5 million.

Funding for the planning and development sector is also down - by 37% - although An Bord Pleanála is taking one of the smallest cuts of any agency, down just 2% to €12,829 million.

(BMcC/GK)