A government drive to reduce the cost of social housing is threatening the financial stability of registered social landlords, the Housing Corporation was told this week.

Responding to the corporation's National Affordable Housing Programme, under which RSLs will compete with private developers for grants from 2006, the National Housing Federation cast doubt on the scale of savings already achieved.

A study published last month suggested that the corporation's investment partnering approach, under which grants were focused on large RSLs, had produced savings of 9%, with 28 extra homes built with every £10m of grant.

But the NHF said the evaluation - carried out by the Chartered Institute of Housing - needed to be studied closely, as RSLs might have felt under pressure to give a less-than-accurate picture in order 'not to damage existing' relationships. …