Rayner to be handed nearly £1bn to fund council housing drive, according to reports

Angela Rayner will be handed almost £1bn in funding as part of a plan to double the amount of council homes built each year, according to reports.

The housing secretary is said to have agreed a substantial top-up for the Affordable Homes Programme from Rachel Reeves, the chancellor, ahead of next week’s Budget.

Reports in The Times, the Evening Standard, The Sun and the Daily Mail claim between £500m and £1bn will be released over the next 18 months with larger sums to follow in next spring’s spending review.

The Ministry of Housing, Communities and Local Government said it does not comment on budget speculation, but Rayner has argued council housing will be vital to achieving Labour’s target to build 1.5 million homes over the next five years.

In July, she wrote to all local authority leaders and chief executives in England notifying them of the party’s plans to provide details of government investment in social and affordable housing at the spending review.

She said the announcements would be made in order to allow social housing providers to “plan for the future and help deliver the biggest increase in affordable housebuilding in a generation”.

The letter also confirmed funding of £450m for the third Local Authority Housing Fund to enable councils to acquire and build more than 2,000 homes for families at risk of homelessness.

Rayner’s council house building drive is reportedly linked to Labour’s restriction of right-to-buy rules, which aim to stem a net annual loss of more than 11,000 council homes due to tenants buying their homes. 

The housing secretary is pledging to build enough homes to reverse this loss by April 2026 through a multi-year affordable housing settlement aiming to return building rates to the levels achieved under Gordon Brown, when more than 30,000 social homes were built each year.

The programme aims to avert a projected £9bn rise in benefit payments and address soaring costs for temporary homeless accommodation that are weighing on some councils.

The government currently spends £30 billion a year on housing benefits, up by 50% since 2010, with the cost forecast to reach £39 billion by the end of this decade.

Analysis by the Centre for Homelessness Impact has found record levels of homelessness are now costing taxpayers £1.9bn a year, with councils spending £474m each year on B&Bs for homeless people, three times the among spent tens years ago.