Residents trapped in homes they cannot sell because of concerns over cladding have been subject to a “shocking betrayal” by the Government, a Tory MP has said.

In response to the Grenfell Tower fire, the Ministry of Housing, Communities and Local Government (MHCLG) made £600 million available to fund the replacement of aluminium composite material (ACM) cladding on buildings above 18 metres, but by April this year it had only paid out £134 million.

In March, it announced a further £1 billion would be made available to fund the replacement of other forms of dangerous cladding on high-rise buildings but estimates suggest this would meet only around a third of the total costs.

During housing, communities and local government questions, Stevenage MP Stephen McPartland said: “The Secretary of State (Mr Jenrick) has overseen a shocking betrayal of millions of people who are trapped in flats they cannot sell because of cladding, irrespective of the height.

When is the Secretary of State going to get out of his ivory tower, stop talking and start actually helping our constituents?

“Mortgage companies are refusing to remortgage. Shared ownership tenants that only own 10% are being forced to pay 100% of the costs.

“When is the Secretary of State going to get out of his ivory tower, stop talking and start actually helping our constituents?”

Responding for the Government, Mr Jenrick told the Commons: “I don’t agree with that analysis of the actions we have taken as a Government. We’re bringing forward the biggest change to building safety regulation in a generation.

“We’ve outlined plans for our £1.6 billion fund. Of course, there’s more that we could do. This is one of the most challenging and difficult issues faced by the Government today or indeed any government built up over many generations. But we intend to tackle it and to provide support for those in need.”

Earlier, Labour MP Rebecca Long-Bailey (Salford and Eccles) said many people are unable to sell their homes due to dangerous cladding.

She said: “Countless Salford residents are among over 700,000 nationally still living in dangerously-cladded homes. Yet only 65 registrations to the Building Safety Fund have been allowed to proceed.

“An estimated 1.5 million people can’t sell their home and exorbitant remediation costs are still being passed on to leaseholders for defects they didn’t cause. Will (housing minister Christopher Pincher) end this protracted scandal today and commit to the proposal set out by the End Our Cladding Scandal campaign and the HCLG Select Committee?”

Mr Pincher responded: “I have every sympathy with the situation that (Ms Long-Bailey’s) constituents find themselves in. She will understand that in order to target the right buildings and make sure that the buildings most at risk are prioritised, it is important that the money dispersed by the Government is spent effectively.

We are working with the owners and with the submitters of the registrations to make sure they get the information right and as soon as they get the information right, we can determine when we can get the money out of the door

“We’ve had 2,784 registrations to the end of September – 1,857 of those, many of them received on the last day of application in July, were incomplete.

“We are working with the owners and with the submitters of the registrations to make sure they get the information right and as soon as they get the information right, we can determine when we can get the money out of the door and I hope that we’ll get the first money out of the door very soon indeed.”

Labour also accused the Government of “broken promises” over council funding.

Shadow communities secretary Steve Reed said: “Councils are facing in-year cuts of around £3 billion because the Secretary of State (Mr Jenrick) broke his promise to fully fund councils for the cost of getting communities through the pandemic, and that’s according to the Conservative-led Local Government Association.

“He tries to wish this away by bandying around Government funding intended for specific purposes that cannot be used to plug gaps in the councils’ general funds.

“So, since he would not wish to try and pull that same trick again here, would he tell the House which services he now expects councils to cut to plug the funding gap created by his broken promises?”

Local government minister Luke Hall said Mr Reed should “look at the facts”, and told MPs: “Local government has reported a £3.1 billion increase in spending pressures for Covid, we’ve supported them with £4.8 billion – including £3.7 billion of un-ringfenced funding.

“What is not surprising is (Mr Reed), who has turned up again today talking down councils and their ability to respond to this crisis. Local authorities have proven themselves to be a resourceful, dynamic force and we should be praising them.”