Labour’s £10bn housing pledge falls short on local authority involvement
Only 4 per cent of homes associated with Labour’s £10bn initiative to revitalize council housebuilding in the UK will be constructed by local authorities, reports BritPanorama.
Prime Minister Andy Burnham announced the initial funding wave from the £39bn Social and Affordable Housing Programme (SAHP) on Tuesday, stating, “Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again.”
However, an analysis indicates that out of 33 partner organizations receiving funding, only three are local councils. These councils — Cambridge, Newcastle, and Eastleigh — are set to build an estimated total of 2,811 of the 73,600 planned homes, constituting a mere 3.82 per cent of the overall target.
These three authorities will receive £392.2 million of the £9.58 billion funding, which highlights a significant reliance on non-profit housing associations like Clarion, Orbit, and Places for People for the remaining construction.
Shadow Housing Secretary James Cleverly criticized the announcement, labelling it a “con,” and asserting that “Labour’s so-called council house programme is already unravelling.” He warned, “The homes won’t have to be delivered until 2039,” expressing concern that the funding schedule shifts the burden onto future generations. Cleverly maintained that fewer homes would be built compared to past initiatives, adding that social rent would be more costly.
Though chosen housing associations are required to adhere to government social and affordable housing targets, they will operate the homes legally, differentiating them from traditional local authority ownership.
Neither the government nor Homes England, the agency managing the programme, has disclosed the criteria for partner selection.
Liberal Democrat Housing spokesperson Gideon Amos MP deemed the announcement misleading, claiming, “For years, prospective buyers were cheated by the myth of affordable housing under the Conservatives,” and asserting that the current funding was just a rebranding of inadequate support for council housing.
Amos underscored his party’s commitment to building 150,000 council houses and social rent homes per year, arguing for a genuine fair housing system.
The £10 billion initiative follows Burnham’s earlier commitment to launch the largest council housebuilding effort since the post-war era when local authorities in the 1970s averaged 103,000 homes annually. In stark contrast, only 2,200 homes were built by councils in the five years leading up to 2025.
Experts highlight several barriers hindering local councils’ ability to build housing stock, with approximately 90 per cent facing legal or financial constraints. Nearly half of housing authorities currently possess no stock, as they previously transferred ownership to housing associations.
Additionally, local councils still struggle under £31.8 billion of historic housing debt, incurring substantial annual interest costs. Although repayments on this debt were due to initiate in 2012, failure to do so has led to a nearly £3 billion increase, compounded by various emergency financial measures.
The latest official data reveals that while councils added 10,074 homes to their portfolios in 2024/25, a net loss of 224 homes occurred due to over 10,298 losses, predominantly driven by Right to Buy sales.
Local leaders and house builders have previously expressed to The Independent that increasing sector costs, alongside insufficient central government support, hinder efforts to construct more council homes.
Housing campaigners, such as Sarah Elliott, chief executive of Shelter, have urged the government to eliminate financial obstructions affecting councils’ ability to build homes. Elliott noted, “Local authorities still face major barriers to getting spades in the ground,” but asserted that conditions could improve if councils receive adequate support.
In response to the announcement, an MHCLG spokesperson stated, “We have not wavered in our ambition to get councils building at scale again. The funding is the first step in our £39 billion commitment to back a new era of social, affordable and council housebuilding.”
Despite the ambitious rhetoric, the reality of local authority involvement in this housing initiative presents significant challenges that remain to be addressed.
