Tag: Social and Affordable Homes Programme

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Social rent council housing should be the Government’s first housing priority

The first tranche of funding for the Government’s Social & Affordable Homes Programme (SAHP) has been announced. Of 73,617 “affordable homes” to be built by “Strategic Partners”, funded by the programme, only 3.8% are to be built by councils.

On X, the Labour Party said that “Labour is funding more than 70,000 new homes across England, putting councils at the heart of house building”. Another post said, “This is the biggest council house building revival in decades.” In his first speech in Parliament Andy Burnham referred to “the biggest council house building programme since the post-war period”. What seems clear to us at the Labour Campaign for Council Housing is that this aspiration on council housing cannot possibly be achieved by the SAHP as currently constituted.

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The stark reality is this:

  • £9.58 billion (outside of London) is being given to 33 “Strategic Partners” for multi-year programmes up to 2039;
  • Just three of them are councils (Cambridge, Eastleigh and Newcastle), with a combined funding of £392.2 million, supporting 2,811 homes;
  • The other 30 “Strategic Partners” are Housing Associations, save for two ‘for profit registered providers’, Sage and Park Properties Housing Association, and the large volume builder Vistry;
  • Sage and Vistry will receive almost as much as the councils combined; £350 million each.

Given that only 2,811 of the 73,617 homes will be built by councils, this cannot possibly represent “putting councils at the heart of house building”. Nor can it be described as “the biggest council house building revival in decades”.

The Government has said that “future stages of the programme will be tilted more towards councils”. Yet there is, currently, no funding ring-fenced for councils. They have to bid in the “Continuous Market Engagement” process, competing for grant with Housing Associations, “for profit registered providers”, developers and builders.

In London the funding is under the control of the Mayor rather than Homes England. Tom Copley, Deputy Mayor for Housing and Residential Development, announced that “60% of the funding from the first round of the mayor’s new SAHP will go to London boroughs to deliver even more new council homes.” Even so, if 60% was applied nationally, it would still only equate to 10,800 council homes a year. Demolitions and Right to Buy sales will reduce the net number. (Red Brick editor note: The Government is currently progressing reforms to restrict the Right to Buy through the Social Housing Bill ).

SAHP: “a flawed programme”

For us at the Labour Campaign for Council Housing, it was clear when it was first announced that the SAHP was “a flawed programme which would not solve the housing crisis”. The £39 billion pledged over a decade was never going to be sufficient. The 300,000 “affordable homes” it will fund equates to an average of 30,000 a year. Of those, 18,000 will be social rent homes, comprising just 6% of the Government’s annual target for overall housing supply. In no sense can this be described as ‘historic’.

There have only been six years in England when 300,000 or more homes have been built. In those, council housing made up an average of 41%; 135,000 a year.

On the last two occasions when Labour conferences have discussed housing, in 2019 and 2021, overwhelmingly the delegates voted for a Labour government to fund 150,000 social rent homes a year, including 100,000 council homes. Shelter and other organisations have said that as an absolute minimum 90,000 social rent homes a year are necessary. This would require far more funding than £39 billion.

The SAHP average grant is around £130,000 per unit (£39 billion for 300,000 homes). In its recent report for Shelter, Savills estimated an average grant per social rent unit of £177,000. That would add up to £15.9 billion a year; £159 billion for a decade. The Centre for Cities estimated that £16.6 billion a year would be needed to replicate the level of council house building from 1956 to 1979.

Is this unrealistic? No. We should remember that the Attlee Government, despite facing far worse economic circumstances than we do today (the debt to GDP ratio was 250%, compared to under 100% today), funded around 800,000 council homes. It is a question of priorities.

Investment today saves money in the future. Investment in social rent council homes will save money on the housing benefit bill by taking households out of the expensive private rental sector. It will save money for the NHS by taking households out of homes which will ruin their health. It will save councils the exorbitant cost of Temporary Accommodation.

“Affordable housing”

The scale of funding isn’t the only issue, though. The Government has kept the Tory definition of “Affordable Housing”. For instance, “Affordable Rent”, an austerity measure, was introduced by the Coalition Government to facilitate a 60% cut in grant funding. At up to 80% of market rents, it is unaffordable for many. It is £60 a week more than social rent in England, £90 a week in London. As well as impoverishing tenants, it simply drives up the housing benefit bill. Why does the Government propose to continue funding it through SAHP?

If the record numbers of 135,580 households in Temporary Accommodation and 1.3 million households on the social housing waiting lists are to be driven down, the Government needs to make social rent council housing its first priority, on at least the scale that Shelter has called for. If the gulf between the Government’s rhetoric and the actual content of its housing programme is not closed, there will be a political price to be paid.

Andy Burnham, whilst Mayor of Manchester, was right when he said, “The Government should make building hundreds of thousands of council homes its defining purpose. No other policy, achievable within a Parliament, would have greater social and economic benefits.”

That requires significantly more funding and the abandonment of the Tory definition of “Affordable Housing” (see our Letter to Angela Rayner). All the funding should go to social rent homes, the only genuinely affordable tenure for tenants. The Government cannot fend off the threat of a very right wing government, whatever its composition, without beginning to resolve the housing crisis. Council housing remains the key to that.

Martin Wicks

Labour Campaign for Council Housing

Details of membership and affiliation to the campaign can be found here.

Postscript

The 2026 Labour Party Conference voted through a UNITE resolution, as part of a composite motion. The conference voted for:

  • 90,000 social rent homes a year;
  • Ending Right to Buy;
  • Cancelling council housing debt;
  • A publicly funded retrofit programme.
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More council homes, lower bills, stronger communities: Cambridge’s approach to building better

When people talk about sustainable housing, they generally focus on the physical structures. During my career as an architect, and now as part of Cambridge City Council’s Labour administration following the May 2026 elections, I have developed a broader vision of what counts as sustainable, looking beyond the building itself to ask how it works within the wider social setting, as a home and not just a house, and as part of a neighbourhood that meets people’s wider needs.

This means taking account of both the built and social environment, providing more than just basic housing, and understanding how a house contributes to the surrounding streetscape. When we build, we are not just assembling structures but weaving new threads into the existing community, and we need to make sure that everyone has the facilities and spaces they need to live sustainable, good lives.

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So while my focus in Cambridge is on the quality of our council housing, our planning always takes account of that wider perspective, so that we build homes people want to live in, in attractive neighbourhoods with the amenities they need and good transport links.

We have built many council homes in Cambridge in the last eight years. Initially we had support from a £70 million funding package from our devolution deal with the Cambridgeshire and Peterborough Combined Authority, through which we committed to building 500 new council homes. In those early days, the Council’s focus was almost exclusively on quantity as we worked to hit our target. While we built to standards that were slightly better than national building regulations, the volume of delivery was our primary driver. We completed our 500th council home a year ahead of schedule, and have now built more than 850 new council homes.

We have evolved our approach in recent years. We still want to build at pace, but we also want to build to the highest possible quality. Investing in the fabric of the building was a strategic choice. Although it can increase upfront costs, it directly helps our tenants by bringing down utility bills and improving the comfort of their homes. This is only growing in importance as we experience the consequences of the climate emergency.

As the executive councillor for planning, I was proud to help bring forward our sustainable construction Supplementary Planning Document (SPD). Alongside this, we introduced a sustainable housing guide for our council house programme that aimed for certified Passivhaus standards. This was a highly significant moment, making it clear that we were aiming to build the most energy-efficient homes possible in Cambridge.

Yet, as any local authority knows, we have to constantly balance environmental ambitions with financial reality. We discovered that strict Passivhaus certification was incredibly expensive and financially demanding. Furthermore, Passivhaus design is heavily reliant on orienting and positioning buildings in particular ways. That’s not always possible when you are working with complex, irregular, or difficult urban “infill” sites – the sort we rely on to deliver the density of homes our city  desperately needs.  Recent schemes including Arbury Road and Kings Hedges in North Cambridge relied on the Cam Standard to make them viable.

We have not let this curtail our ambitions. In 2024 we created the “Cam Standard.” This bespoke standard acts as a robust baseline that maintains our commitment to energy efficiency and climate-change resilience, while offering the practical flexibility required for complex urban sites. It is a realistic, scalable stepping stone that ensures all our developments prioritise lowering energy use, with the explicit goal that all proposed council homes will target Net Zero Carbon by 2030.

And now we have the next stage to look forward to. as Cambridge is one of three councils to have secured long-term funding as a strategic partner under the government’s Social and Affordable Housing Programme (SAHP). This funding gives us the certainty we need to plan over a longer horizon and develop the pipeline for building another 1,400 high-quality council homes across our city, with the aim of ensuring 60% of those are available at social rent.

This funding is especially vital given the massive development pressures facing Cambridge. The government is planning major expansions, with a Development Corporation set to oversee significant growth. Our position as a Labour council is clear: we must protect the integrity of council house building and ensure there are genuinely affordable homes for our residents. Through our joint venture with The Hill Group, the Cambridge Investment Partnership (CIP), we aim for 50% of the homes built on our schemes across the city to be council homes. We will be engaging robustly with the incoming Development Corporation to ensure they recognise how vital this 50% target is in a city with such highly priced market homes.

Looking forward, all our new-build sites are fully electric and gas-free, and we want to provide on-site energy generation through PV. At the same time we’re looking at energy storage systems. While current lithium batteries raise environmental and safety concerns, the emergence of sodium batteries offers an exciting, sustainable alternative. Our ultimate goal is to provide “zero-utility-bill” council housing.

They are also designed as “Lifetime Homes” where a young couple can move in and expect to remain for their entire lives. All homes have private outside spaces and are wheelchair accessible, featuring wider doorways and, downstairs toilets. 5% of homes are also built with further adaptations for wheelchair users in mind.

Through our house building programme we have also built five new community centres, seven new parks and play areas, two pre-schools, one library and new shops. We have provided a further £12.2 million of funding to support local schools, parks, sports centres and the NHS.

By building high-quality, adaptable, and community-focused homes, I like to think that we also show private developers what is truly possible. In doing so, we are honouring the deep legacy of our movement. As the great Aneurin Bevan famously observed of post-war housing needs: “While we shall be judged for a year or two by the numbers of houses we built, we shall be judged in ten years by the type of houses we build.”

In Cambridge, as a regular top 10 council house builder, we have delivered on the numbers. Now, through the Cam Standard and our strategic partnership, we are ensuring that the houses we leave behind will stand as a proud legacy of sustainable, inclusive, and fair municipal design for generations to come.

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Two things the new Prime Minister could do immediately to boost social rent supply

Andy Burnham’s commitment to deliver the biggest programme of council and social housebuilding since the post-war era is both ambitious and hugely welcome.

For the millions of people trapped in England’s housing crisis, including the 176,000 children growing up in temporary accommodation, that ambition cannot come soon enough.

The good news is that momentum is already building. Thanks to decisions already made by the Government, councils and housing associations increasingly have the confidence, funding and policy certainty to ramp up delivery of social rent homes. NHF figures show a 57% increase in social rented homes started last year.

These are the green shoots of a renaissance in social housebuilding. But they are fragile and progress could easily stall. To sustain momentum and translate ambition into delivery, there are two immediate steps the new Prime Minister could take.

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The first is to immediately confirm successful bids for Strategic Partnership funding under the Social and Affordable Homes Programme (SAHP). These bids have been submitted and assessed and are now awaiting political approval before they can be announced. Councils and housing associations have schemes waiting, planning secured, and just need the funding confirmed to get building tens of thousands of homes. A summer of delay and uncertainty on grant funding could bring the current momentum to a halt. This creates a real risk that providers will be forced to delay, scale back or even abandon development opportunities, ultimately leaving families trapped in unaffordable temporary accommodation or private rent for longer.

The second is to top up the funding for this and subsequent years of the SAHP – either via redirecting existing budgets immediately or via new funding at the next fiscal event. The £39bn for social housing announced at last year’s spending review was a generational shift in support, but it is spread over 10 years, with the funding profile weighted toward later years, while many schemes are ready to proceed now.

We could build more homes, more quickly, on schemes that are ready to go, if more funding was available early on, for both Continuous Market Engagement and Strategic Partnership funding routes.

Doing these two things immediately would sustain momentum, get spades in the ground and more households into desperately-needed social rent homes as quickly as possible.

There are opportunities to go much further, to deliver the increase in social housebuilding we need, whether through seizing the opportunities of devolution, New Towns, Land Value Capture, reforming council housing debt rules, or exploring new models of public ownership. Councils and housing associations stand ready to work alongside communities and the government to unlock these opportunities, but they will take time to bear fruit. In the meantime, we must maintain and accelerate the progress already being made.

England’s housing crisis is one of the defining social and economic challenges of our time. It damages life chances, drives homelessness, places unsustainable pressure on public services and undermines economic growth. The government has laid important foundations for a new era of social housebuilding. The priority now is to turn that ambition into delivery – building more homes, more quickly, for the people who need them most.

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Can England afford (not) to build council homes?

Before the 2024 General Election, I had the privilege to work with England’s largest council landlords on Securing the Future of Council Housing. The report set out five key recommendations to allow councils to once again play a major role in housing supply, and to refurbish and improve existing homes and neighbourhoods after decades of under-investment.

It is an ambitious vision for a new, better relationship between central government and council landlords. Over 100 councils led by different parties across the country backed the report, laying the ground for a powerful coalition which has successfully influenced Government policy since. Every council involved has been essential in raising the volume of council housing’s voice, but particular credit should go to the London Borough of Southwark under Kieron Williams’ leadership for kickstarting the campaign, and to Sheffield City Council and Leeds City Council for helping it spread.

On Monday, Andy Burnham pledged the ‘biggest council housebuilding programme since the post-war period’ – a period when councils delivered over 4 million homes in 36 years. Since that time, more council homes have been sold than new ones delivered. It’s been a long wait, but it may finally be time for a renaissance in council housing.

But can we afford it?

Yet serious questions are being asked about whether we can afford it. This is not just because it costs money to build low-cost social homes. It is because councils are public bodies, and their borrowing is ‘on balance sheet’. Most social homes in England today are owned and delivered by non-profit Housing Associations, whose borrowing is ‘off balance sheet’. It doesn’t count towards public debt. That difference has shaped housing policy for decades.

In this blog, I’m going to try to demystify the impact of council housing on public debt, and how the UK’s fiscal rules change things.

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How council housing came under financial attack

Council housing is treated differently from all other council-owned assets in accounting terms. Council landlords keep rental income in a Housing Revenue Account (HRA), which is kept separate from other council income. This is to protect social tenants’ money, so it doesn’t get used to fund general council services.

In 2012, the Government and councils agreed a ‘self-financing settlement’ aiming to make HRAs more independent and more sustainable. The settlement was supposed to give councils the financial certainty to invest in their homes, but it was quickly ripped up. Social rents were cut and capped with little notice, borrowing rates for councils were increased overnight, and councils had to sell more homes with bigger discounts following Right to Buy reforms. Top it all off with a pandemic, geopolitical turmoil and rising inflation and interest rates, and the unsurprising result is that most HRAs are in poor financial health. A 2024 report from Savills and the Chartered Institute for Housing suggested that debt cancellation of £17bn would be needed to make HRA borrowing sustainable across the board. This means many council landlords cannot invest in homes in the ways communities need.

Accounting for council housing

In the UK’s national accounts, all HRAs are consolidated and treated as a single ‘non-financial public corporation’. This means they count towards public debt for the purposes of the UK’s fiscal rules. Fiscal rules are the Government’s self-imposed limits on how much it can borrow, spend and accumulate debt. They are designed to reassure financial markets that the public finances will remain sustainable and so keep the Government’s borrowing costs lower.

Before the 2024 autumn budget, the UK used Public Sector Net Debt (PSND) for our fiscal rules. Council housing performed particularly poorly under this measure. Borrowing to finance public investment – including in council housing – increased the headline debt figure, even if the Government acquired valuable assets in return.

The current Government switched from PSND to Public Sector Net Financial Liabilities (PSNFL). The new rules still count debt the Government owns, but they also count financial assets the Government owns – though not physical assets like homes.

This is where things get interesting for council housing.

By far the largest source of borrowing for council housing is from the Public Works Loan Board (PWLB): effectively, councils borrow money from the Treasury, which raises the money by selling gilts on the international markets. When the Treasury lends to council landlords in this way, under PSNFL it actually creates an asset for the public sector: the money councils owe to HMT.

The result is that investing in council housing is a lot easier than it used to be. Let’s say the Treasury agrees to ‘forgive’ £100 million of unsustainable HRA debt to give councils some breathing room, and councils then take out £100 million of new PWLB loans.

Under the old debt rules, this would have looked like the Government simply taking on more debt. Under the new PSNFL rules, it is treated more like cancelling an old loan and then making a new one. The council owes the Treasury £100 million, but the Treasury also owns a £100 million loan. That new loan is recognised as a public financial asset and is largely netted off public debt.

So there’s no reason not to invest in council housing?

Not quite.

New PWLB borrowing for council housing still increases the size of the Government’s balance sheet and the amount of money the Treasury has to raise from investors to finance the new PWLB loans: HMT has to borrow to on-lend to councils. It is unclear how markets would react to a large-scale increase in investment for council housing using the current model. That depends partly on the scale of new PWLB lending, but above all on investor expectations of the UK’s wider fiscal position.

There’s another problem for council housing. While PSNFL makes investing in council homes easier, it also makes other models of delivering social housing even more fiscally attractive. In February 2026, the Government announced a £2.5 billion scheme to provide loans to Housing Associations at 0.1% for 25 years. Incidentally, that’s a much better deal than councils are getting from the Public Works Loan Board at the moment!

Under PSNFL, these loans to HAs are ‘financial transactions’ because the Government acquires a financial asset (a loan) in exchange for cash. But unlike councils, when HAs take out loans from the Government it does not create a liability for the public sector, because their borrowing is ‘off balance sheet’.

If you can deliver the same kinds of homes using private borrowing via HAs, you may get the same policy results with less public sector borrowing and less gross balance sheet expansion. That should make it easier to maintain investor confidence and help keep the Government’s borrowing costs lower. And that may actually be key to increasing investment in social housing: if the UK can borrow more cheaply, we have more space to increase the size of funds like the Social and Affordable Homes Programme. That’s essential to unlocking more social housing supply.

Can we afford not to invest in council housing?

It’s complicated and there are no easy answers. But alongside asking if we can afford to build council homes, we also need to ask if we can afford not to. The clearest fiscal argument here concerns the high costs managing homelessness.

Councils in England now spend £7.7 million every day to put people up in expensive – often sub-standard – Temporary Accommodation. HAs play a vital role in tackling homelessness, but the buck for homelessness ultimately stops with councils. No one else is incentivised to act the way councils are. Getting councils off the bench and delivering homes may be the only way England stops managing homelessness and starts preventing it.

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