The upcoming Budget is set to inject over £1 billion into social and affordable housing initiatives, significantly expanding local authority funding and devolving greater powers to England’s mayors and regional leaders.
This new allocation will push the overall funding for the 10-year social and affordable homes programme beyond £40 billion. Furthermore, councils will gain assistance in borrowing money from the Government for housebuilding, benefiting from extended offers of preferential interest rates.
A Treasury spokesman highlighted the persistent challenge of housing shortages. They noted that the Prime Minister had pledged to restore public housing stock. This Budget, they added, aims to advance that commitment through substantial investment in affordable homes. It will also help councils secure loans for construction, thereby replacing sold properties and providing homes for citizens.
The announcement of increased financial backing and responsibilities for mayors aims to stimulate economic growth across the nation. Chancellor John Healey emphasised the unfulfilled potential within British communities. He remarked that power and funding have too often been centralised in Westminster.
Therefore, Healey explained, the plan empowers mayors and local leaders with increased funds, authority, and capacity. This will enable them to initiate projects, construct homes, and make locally informed decisions. Prime Minister Andy Burnham, a long-standing advocate for greater devolution, stated his intention to end the practice of local leaders having to solicit funds from Westminster. He called this an inefficient way to govern, reiterating his belief that decisions should be made as close to home as possible.
These plans, scheduled for formal announcement in Wednesday’s Budget, will provide local leaders with enhanced flexibility for investment decisions. An initial £285 million is allocated for next year. This move signals a shift away from reliance on diverse bidding pots managed centrally from Whitehall. Areas without current strategic authority status will still access a share of this new local authority funding during a transitional period.
Additionally, the Government will collaborate with mayors to design a new £1.5 billion borrowing facility, effective from 2028. This facility will give them greater access to capital for various projects. Strategic authorities will also receive £150 million next year to build their capacity, enabling them to assume new powers and manage complex projects and investment programmes.
Claire Ward, chairwoman of the UK Mayors Network, welcomed the government’s commitment. She commented that greater devolution, alongside appropriate powers and resources, would transform ambitious plans into tangible, lasting change for communities. She also pledged to advocate for further tools to foster regional prosperity.
Lord Sadiq Khan, London’s Mayor, suggested that enhanced investment capabilities could facilitate significant infrastructure projects. He cited examples such as the West London Orbital route and extensions to the Bakerloo Underground line and Docklands Light Railway. Moreover, he mentioned the redevelopment of Stratford International station.
