Budget to allocate over £1bn for housing and expand regional borrowing powers

Chancellor John Healey is set to present his first Budget on Wednesday, with the announcement expected to include more than £1bn for social and affordable housing in England. This allocation will push the total funding for the government’s ten-year homes programme beyond £40bn. The plans are designed to provide greater powers and funding to mayors and regional leaders across England, aiming to give these officials more flexibility and authority over local investment decisions.

Under the proposed measures, councils will be assisted in borrowing money from the government to invest in house-building through the use of preferential interest rates. The Treasury stated that an initial £285m in transitional seed funding will be allocated by the government next year to support mayors and local leaders. This funding is intended to reduce reliance on fragmented bidding pots in Whitehall. Areas across the country that are not yet strategic authorities will also be able to access a share of this £285m to unlock projects that contribute to growth in their specific regions.

The government will confirm that it will work with mayors to design a new £1.5bn borrowing facility from 2028. This facility would allow local leaders to access the capital needed to support local priorities, which could be directed towards new homes, revitalising High Streets, or improving transport links. Chancellor Healey stated that mayors and local leaders know what their communities need to grow, which is why the government is providing them with more money, power, and capacity to get projects moving and make the right decisions for their areas.

Prime Minister Andy Burnham described the plans as a shift of power to those who know their communities best. He said he was calling time on local leaders going cap in hand to Westminster, asserting that this was not the right way to run a country. Claire Ward, chairwoman of the UK Mayors Network and Labour’s East Midlands mayor, said that having the right powers and resources through increased devolution would help turn ambitious plans into reality and deliver real, lasting change for communities.

Lord Sadiq Khan, Labour’s mayor of London, added that greater ability to invest could help unlock transformational infrastructure projects. He cited the West London Orbital route, the extension of the Bakerloo Underground line and Docklands Light Railway, and the development of Stratford International station as examples of potential developments.

The Chancellor will also announce more support for small breweries, with the Treasury saying he wants to turn the tide for pint producers. This fresh support follows news that 310 jobs are at risk at Marston’s Brewery in Burton-upon-Trent. The issue was raised at Prime Minister’s Questions earlier this week after owners Carlsberg Britvic revealed plans to shut down operations at the historic brewing site.

Defence spending remains a key talking point ahead of the Budget. Shadow chancellor Andrew Griffith has called for Healey to resign if he fails to set out how the UK will spend 3% of the UK’s GDP on defence by 2030. Healey resigned from his role as defence secretary in June over the defence investment plan, claiming it fell well short of what was needed. He had previously called for defence spending to rise to 3% of GDP by 2030, on the way to reaching a Nato target of 3.5% in 2035.

Defence Secretary Wes Streeting responded to the opposition’s comments by saying the Conservatives were to blame for failing to invest in the military while in office. He stated that the prime minister had made it clear the government was determined to give the armed forces the investment needed to keep the country safe. Meanwhile, departing Treasury entrepreneurship adviser Alex Depledge has criticised the government’s treatment of start-ups, telling the Sunday Times that they were being treated as a sideshow and should not be pushed to the margins of economic policy.