Angela Rayner has secured a 10 year funding package to build more affordable homes across the country as part of the Government’s long-awaited spending review, The i Paper understands.
Chancellor Rachel Reeves is due to double the funding period for affordable housing from the usual five years in a move that industry insiders said would provide much needed stability to the sector.
It comes as doubts have been raised over whether Rayner can meet Labour’s pledge to build 1.5m homes before the next election but she is understood to believe that more money for social housing is crucial if the target is to be met.
The 10-year guarantee comes as Reeves commits to spending billions of pounds in capital expenditure to boost housing, transport and energy infrastructure.
While it is unclear what the level of spending will be on affordable housing, there is speculation that it could be around £25bn – just a fraction more than the £2.3bn a year put forward by the previous Conservative Government.
Government insiders insisted that they did not recognise the £25bn figure, but confirmed a 10-year settlement was due to be announced by the Chancellor as part of her spending review.
Industry sources welcomed the news of a 10-year pipeline of affordable housing cash, stating it would give the sector the security it needs to deliver social housing.
“The concept of a 10 year cycle is a good thing,” one housing source told The i Paper. “If you constantly have funding cycles of five years, then your delivery slows down because housing associations and councils can’t plan for the future. They can’t buy land, they can’t hire staff, and they can’t start allocating sites, because it takes quite a while to build in advance, because they are worried that the money will stop.”
The insider added that it becomes harder for the money to be spent towards the end of the five-year cycle as associations and councils are reluctant to start new projects due to fears that the funding could run out.
Rayner, who is both Housing Secretary and Deputy Prime Minister, has previously spoken about how boosting the levels of affordable housing is a personal priority for her, pledging in July that she would oversee “the biggest increase in social and affordable housebuilding in generations”.
She was among the last Cabinet ministers to agree her department’s funding settlement with the Chancellor ahead of the spending review, and it is understood that a 10-year commitment to social housing spend was a key trade off.
Speaking at the Social Housing Annual Conference in November, she described the Government’s mission to drive more social housing was a “personal mission of mine too”.
“I want to say loud and clear that no longer will social housing be seen as an afterthought, or worse actively discouraged,” she said, before adding: “Under this Government, affordable house-building is the beating heart of our housing plans. We have promised the biggest increase to social and affordable housing and, yes, that also includes council housing too.”
Funding warning – and more trains
But campaign groups have warned that if the money allocated for affordable homes is anything close to £2.5bn a year over 10 years, then the Government will have failed in its promise to deliver a “council house revolution”.
Matt Downie, chief executive at Crisis said: “A 10-year investment in funding for genuinely affordable housing would provide the housing sector with the certainty to build new homes, at a time when there is a critical shortage for people in need.
“However, a long-term affordable homes programme means little without having enough funding to start the delivery of the 90,000 social homes we need a year to tackle the housing crisis and solve homelessness.”
Meanwhile, the Chancellor is also expected to hint at further funding for rail schemes across the North of England in the spending review on Wednesday.
square SPENDING REVIEW Rayner and Reeves reach eleventh-hour truce in spending battle
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Further details on a new Liverpool to Manchester rail link, along with a commitment to provide funding for the Transpennine Rail Upgrade from Manchester to Leeds due to be announced in the following days, The i Paper has been told.
Industry sources said the Chancellor will announce the funding support in the days after the spending review as she seeks to ram home her message that she is investing the country, having seen previous funding commitments fall largely unnoticed by the electorate.
It comes after Reeves has also already announced some £15.6 billion of spending on public transport in England’s city regions, and £16.7 billion for nuclear power projects, the bulk of which will fund the new Sizewell C plant in Suffolk.
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