A major project to make hundreds of council homes across Southampton more energy efficient will get under way this year despite the Government watering down a flagship scheme.

The contract, arranged through the Government’s Energy Company Obligation (ECO) scheme, will see upgrades to the city’s most worst insulated council properties.

But civic chiefs are unable to identify which houses and flats will see work done after the Government scaled back support for the ECO scheme.

Prime Minister David Cameron announced a cut in the amount energy companies must spend on ECO so they could reduce bills.

That means there will now be less funding to make homes in Southampton more energy-efficient.

As previously reported, the city council has signed an agreement with outsourcing giant MITIE to carry out work on hundreds of homes.

Most of the funding for the work will come through MITIE.

The council’s Labour Cabinet have voted to set aside £9.3 million of funding for use on projects.

The money comes from the council’s housing revenue account, which is largely made up of council house rent.

City housing boss Warwick Payne said: “We are now having to go back through all of our intended projects because ECO is being significantly watered down.

“The current situation is a bit like going shopping, only for the prices to change midway through.

“We are still committed to providing hundreds of jobs, improving homes’ heating efficiency and helping residents save on their fuel bills in the future.”

The council will set aside £3.2 million for cladding improvements on tower blocks, £3.9 million for cladding improvements on council houses and £2.2 million for cladding on flats.

That will be combined with MITIE’s funding, and the revised list of which areas will see improvements is likely to be announced in the next two months.