If you want to get a council house start job hunting

Housing minister Caroline Flint said tenants could be asked to sign "commitment contracts" which would force them to see a job mentor and get skills training. There could also be more job advisers based on council estates, not in job centres, in an effort to break the "stark" link between social housing and unemployment.

A quarter of Londoners live in social housing, with the highest numbers in areas such as Hackney and Lambeth, compared with 17 per cent in the rest of the country.

In her first speech in her new role, Ms Flint said: "I am concerned about what has been called a collapse in the number of people in council housing in work over the past 25 years. This is a key issue for London which we cannot afford to ignore.

"Council and social housing must continue to support the most vulnerable in society, but it should also be a springboard to opportunity, not just a safety net."

Ms Flint said she would consider radical moves including town halls paying compensation to tenants if they persistently failed to deliver decent services.

The Government is also looking at equity sharing schemes to help tenants buy a stake in their own home and giving them higher priority on housing waiting lists if they had to move borough to take up a new job.

Her speech to the Fabian Society comes days after Gordon Brown outlined his latest welfare-to-work drive which would get companies, including McDonald's, to issue their own qualifications. Cutting the welfare bill by getting more people into work is set to become a key battleground between the parties in the run-up to the next election. The move by the minister is the latest attempt by the Government to appear tough on the benefits system and associated welfare schemes.

Last week new Work and Pensions Secretary James Purnell outlined plans to cut the bill. His adviser David Freud, a City banker who has also been close to the Conservatives, said that two out of three incapacity benefit recipients should not be receiving the payment.

He also warned that nearly 200,000 beneficiaries could be working illegally on the black market. "When the whole rot started in the Eighties, we had 700,000 [claimants]," Mr Freud said in an interview with the Daily Telegraph. "I suspect that's much closer to the real figure than the figure we've got now."

In October, the Department for Work and Pensions is introducing a new test designed to toughen assessments for incapacity benefits.

Talking about council homes, Ms Flint added: "We all agree that social housing is about more than bricks and mortar. I believe we can recapture that sense of pride, creating a culture within social housing that promotes opportunity and social mobility, inspiring people to take control of their own lives.

"We are winning the argument but I want to try to establish a national consensus that building more homes - including more social and affordable housing - is absolutely the right thing to do."