COUNCIL housing estates have become “broken” ghettos dominated by dysfunctional families blighted by unemployment, crime and drug addiction, a Tory report claims today.

The survey, commissioned by Iain Duncan Smith, the former party leader, charts how stable working-class communities of the 1960s have degenerated with tenants trapped in a cycle of welfare dependency.

“What we have done over the last 30 years is create ghettos where we have put all the most broken families,” said Duncan Smith. “As a result these families go on to have broken children. We should be ashamed.”

The report by the Centre for Social Justice, a think tank, claims that the disintegration of council estates has primarily been a result of the long-standing government policy of requiring local authorities to house those with the “greatest need”.

In the early 1980s a council tenant’s average income was 73% of the national average. Today two in three tenants living in “social housing” are among the poorest 40%.

Between 1981 and 2006 the proportion of social housing tenants of working age in full-time employment halved from 67% to 34%.

The report cites further statistics - that eight in 10 social housing tenants are still there 10 years later, and that one in four heads of households are classed as permanently sick or disabled.

Duncan Smith commissioned the report after a series of visits to the Easterhouse estate in Glasgow, once a model of social housing but now almost a byword for social deprivation. “It is a classic example of what has happened,” he said.

The findings are likely to be studied closely by David Cameron, who is expected to place welfare reform and social mobility at the centre of his election manifesto.

The report recommends ending the rule that forces local authorities to put the people in “greatest need” at the top of the housing queue. Under the Tory proposals, councils would be given the power to choose whom they accommodate so that estates have a better social mix with more working families who can act as “role models”.

More controversially the report calls for the abolition of security of tenure for council tenants.

It says that people ought to be encouraged to move out of social housing once they have the means to buy or rent in the private sector.

Security of tenure has long been an article of faith for supporters of the current system. However, the Tories argue that such tenancy terms were only appropriate in the days when most tenants were stable working-class families.

Instead the report suggests tenancy agreements could include conditions requiring the tenant to look for work.

The report says the housing crisis has been compounded by other factors - the growth in population and the lack of affordable housing for the young. It calls for more family-sized housing to be built to help encourage couples with children to stay together.

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