The Government aims to make it easier for councils to build new homes by extending preferential interest rates on borrowing from central government.

A Treasury spokesman said: “For years families have been locked out of a secure and affordable home because we simply haven’t built enough.”

The housing investment could deliver up to 10,000 new homes, as part of what Prime Minister Andy Burnham has described as the largest post-war council and social housebuilding programme.

More than two million council homes have been sold through Right to Buy since the 1980s, yet successive governments failed to replace them adequately.

Over 1.3 million households currently sit on social housing waiting lists, while a record 177,500 children are trapped in temporary accommodation – a figure that climbed 5 per cent in just one year. Only 12,250 social rent homes were completed in 2024/25.

Private housing costs continue to squeeze families too, with average monthly rents rising 3.8 per cent in the year to September and house prices reaching £273,000.

Mairi MacRae, acting chief executive of Shelter, called the new funding “another important step in the right direction” but urged the Government to go further, saying: “The autumn Budget is the Prime Minister’s chance to remove unsustainable housing debt from council balance sheets and truly turbocharge the delivery of social rent homes.”

Alongside the housing measures, the Chancellor is anticipated to allocate an initial £285million next year to support mayors and local leaders, reducing their dependence on what the Treasury described as fragmented bidding pots administered from Whitehall.

A further £150million will go towards building the capacity of strategic authorities to manage complex investment programmes.

From 2028, a new £1.5billion borrowing facility designed in partnership with mayors will give regional leaders greater access to capital for local priorities.

Prime Minister Burnham said: “I’m calling time on local leaders going cap in hand to Westminster. That is no way to run a country.”

Claire Ward, the East Midlands mayor who chairs the UK Mayors Network, welcomed the commitment, saying increased devolution would help turn “ambitious plans into reality.”

London Mayor Lord Sadiq Khan said the enhanced investment powers could “help unlock transformational infrastructure projects” including the West London Orbital route and extensions to the Bakerloo line and Docklands Light Railway (DLR).

The Chancellor’s Budget preparations were dealt a setback on Saturday when Alex Depledge, the Treasury’s entrepreneurship adviser, revealed she was stepping down from the position. Her departure is scheduled for Thursday – just one day after Healey delivers his inaugural tax and spending plans.

The Conservatives have seized on the Budget to press Mr Healey, the former Defence Secretary, on military spending. He quit his position under Sir Keir Starmer after insisting that defence expenditure needed to reach 3 per cent of GDP by 2030, on the path to meeting NATO’s 3.5 per cent target by 2035 – aims that he felt were not prioritised.

Shadow Defence Secretary James Cartlidge said: “The Chancellor absolutely has to set out his plan for 3 per cent in the Budget – anything less would be a dereliction of duty.”

Shadow Chancellor Andrew Griffith went further, calling on Mr Healey to resign if he fails to outline a credible path to the 3 per cent target, warning that “you cannot have a strong economy without a strong defence.”

Defence Secretary Wes Streeting hit back, blaming the Conservatives for neglecting military investment during their time in government. Mr Streeting did warn in The Telegraph overnight, though, Britain must be ready for war within “1,000 days”.

Mayors Given New Powers to Unlock the Untapped Potential of England’s Cities

England’s mayors are set to receive greater financial powers and increased freedom to invest in their regions, as the government prepares a major shift in how economic growth is funded across the country. The proposals are designed to help cities and communities make better use of their economic potential, create jobs and deliver projects without repeatedly relying on decisions made in Westminster.

Chancellor John Healey has argued that too much of England’s potential has been left “untapped and wasted” while money and decision-making have remained concentrated in central government. Under the proposed approach, regional leaders would gain greater control over investment, allowing them to respond more directly to the needs of their communities. The plans are expected to feature in the government’s Budget on Wednesday. <Cite refs={[“turn269757search3″,”turn269757news8”]}/>

A New Approach to Local Investment

One of the central elements is an initial £285 million funding allocation for the next financial year through a new Good Growth scheme. Rather than requiring local leaders to compete repeatedly for separate pots of money controlled by Whitehall, the government wants to give strategic authorities greater flexibility to decide where investment is most urgently needed.

That could mean directing resources towards transport improvements, high-street regeneration, housing developments, employment programmes or other projects intended to strengthen local economies.

For many regional leaders, the existing funding system has been criticised for creating uncertainty. Councils and combined authorities can spend considerable time preparing bids, waiting for decisions and adjusting plans to match central government priorities. A more predictable approach could allow them to plan projects over longer periods and coordinate investment across neighbouring communities.

However, the effectiveness of the new system will depend on how the money is distributed, what conditions accompany it and whether the available funding is sufficient to meet local ambitions.

Greater Financial Independence for Mayors

The government is also planning a £1.5 billion borrowing facility from 2028, developed in partnership with mayors. This would give regional authorities greater access to capital for projects that could support long-term economic development.

Large infrastructure schemes often require substantial investment before their benefits become visible. Transport connections, housing developments and the regeneration of struggling town centres can take years to complete. Greater access to borrowing could help mayors develop projects on a longer timescale instead of relying entirely on short-term grants.

An additional £150 million is expected to help strategic authorities build the staff, expertise and organisational capacity required to manage more complex investment programmes. This is important because additional financial powers alone cannot guarantee successful delivery. Authorities also need experienced planners, financial specialists and project managers capable of turning proposals into completed developments. <Cite refs={[“turn269757search3″,”turn269757news8”]}/>

Prime Minister Andy Burnham has presented the reforms as a move away from local leaders having to approach Westminster repeatedly for permission and financial support. His argument is that decisions should be made closer to the people affected whenever practical.

The principle is straightforward: local leaders often understand the challenges facing their areas better than officials working hundreds of miles away. A mayor dealing with congested roads, limited housing or declining commercial centres may be better placed to identify which investment would make the greatest difference locally.

Nevertheless, decentralisation also places greater responsibility on regional authorities. Mayors will need to explain their spending decisions, demonstrate measurable results and show residents how public money is being used.

Housing at the Centre of the Growth Debate

Housing is likely to be one of the most significant tests of the government’s approach. Many parts of England face pressure from high rents, limited affordable accommodation and lengthy waiting lists for social housing.

Local authorities have argued that a shortage of funding and the financial constraints facing councils have made it difficult to deliver the homes their communities need. More flexible investment arrangements could help authorities coordinate land, infrastructure and housing plans, potentially making it easier to bring stalled developments forward.

The government has also been discussing a wider programme of investment in social and affordable housing. The broader objective is to increase supply while ensuring that new developments are supported by roads, public transport and essential services.

Building homes requires more than granting planning permission. Developers need access to suitable sites, construction workers, utilities and transport connections. Local leaders must also consider whether schools, health services and other facilities can accommodate growing populations.

If additional powers allow mayors to coordinate these issues more effectively, they could help remove obstacles that have delayed development. But the final results will depend on funding, construction capacity, planning decisions and the willingness of public and private organisations to work together.

New Planning Powers Could Change City Development

Financial reforms form part of a broader programme of devolution that includes changes to planning powers. Under the English Devolution and Community Empowerment Act 2026, mayors are being given a stronger role in shaping strategic development across their regions.

The planned arrangements include the ability to intervene in certain planning applications considered important to a wider area, prepare Mayoral Development Orders that grant planning permission for specified developments, and raise money for infrastructure through a Mayoral Community Infrastructure Levy in eligible areas outside London.

The government has consulted on the regulations needed to implement these powers. It has indicated that the relevant arrangements for intervening in strategically important planning applications could begin in early 2027, subject to the required legislative steps. <Cite refs={[“turn269757search1″,”turn269757search2”]}/>

These changes could help mayors coordinate housing, transport and economic development across local authority boundaries. A new housing district, for example, may depend on transport links and infrastructure that extend beyond one council’s jurisdiction.

However, stronger mayoral powers may also create disagreements. Councils could be concerned about losing influence over local planning decisions, while residents may question developments that they believe could change the character of their neighbourhoods.

The challenge will be to balance strategic regional priorities with local accountability and meaningful consultation.

Can England’s Cities Close the Economic Gap?

The reforms come amid a longstanding debate about the uneven distribution of economic opportunities across England. London and parts of the South East have benefited from major concentrations of investment, employment and business activity, while some former industrial towns and cities continue to face barriers to growth.

Supporters of devolution argue that regional leaders should have more freedom to build on the strengths of their local economies. Different areas have different needs: one may require improved rail connections, another may need technical training, while another could benefit from investment in manufacturing, technology or tourism.

A national funding model cannot always respond equally well to these different circumstances. Greater local flexibility could help regions develop strategies suited to their industries, workforce and infrastructure.

But transferring responsibility does not automatically remove economic inequalities. Areas with stronger existing economies may have greater access to private investment, skilled workers and development opportunities. Less prosperous communities may require additional support to ensure they can benefit from the new arrangements.

The government will therefore face questions about how funding is allocated and whether the system protects areas that lack the resources to attract investment independently.

What the Changes Could Mean for Residents

For residents, the success of the proposals will ultimately be measured through practical outcomes rather than announcements. People will want to know whether transport services improve, whether affordable homes become available, whether town centres attract new businesses and whether more secure jobs are created.

Businesses may also benefit if regional authorities can make investment decisions more quickly and coordinate infrastructure with local employment needs. Better transport links and training programmes could make it easier for employers to recruit workers and for people to access opportunities.

At the same time, residents will expect transparency over borrowing and public expenditure. Greater financial independence must come with clear reporting, scrutiny and evidence that projects deliver value for money.

Mayors will also need to work closely with councils, community organisations and businesses. Devolution will be more effective if local authorities are treated as partners rather than simply expected to implement decisions made at regional level.

A Major Test for Regional Government

The planned changes represent an important step in the government’s effort to move economic decision-making away from Whitehall and towards England’s regions. The proposed funding, borrowing arrangements and planning powers could give mayors more tools to pursue long-term development and address problems that cross local authority boundaries.

Yet the scale of the opportunity should not obscure the practical difficulties. Public finances remain constrained, major infrastructure projects are expensive, and communities may disagree about how land and money should be used.

The government must demonstrate that the new arrangements produce tangible improvements rather than simply rearranging administrative responsibilities. Mayors, meanwhile, will have to show that greater autonomy leads to better planning, more effective investment and stronger accountability.

England’s cities and regions possess a wide range of economic strengths, but unlocking them will require sustained investment, competent delivery and cooperation between different levels of government.

The real test will be whether the promised powers help turn local ambitions into visible improvements in people’s everyday lives. If they do, the reforms could reshape the relationship between Westminster and England’s regions. If they fail to deliver, the promise of greater local control may prove insufficient to overcome the deeper barriers holding some communities back.