Chancellor Rachel Reeves today announced plans to lever-in private finance to build new homes, on top of a £39bn boost for social housing.
In today’s Spending Review, Reeves claimed she was unveiling the biggest cash injection into housing for 50 years.
Earlier this morning, the government trailed the announcement that £3.9bn per year would be spent through the Affordable Homes Programme over the next decade.
And today (11 June), she told MPs there will be an “additional £10bn for financial investments including to be delivered through Homes England to crowd in private investments and unlock hundreds and thousands of new homes”.
The chancellor confirmed that the 10-year infrastructure strategy will be published “in coming weeks”.
She also pledged £2.3bn “to fix our crumbling classrooms” and £2.4bn to continue the government’s programme to rebuild 500 schools.
Other key announcements included backing for carbon capture projects in Aberdeen and Humberside.
She said: “We want the energy technology of the future built here. Great Britain’s energy will be headquartered in Scotland. Towns that powered the industrial revolution will power the next industrial revolution.”
As part of a new Affordable Housing Programme, Reeves said the government will allocate £39bn over the next decade to social and affordable housing.
Rico Wojtulewicz, head of policy and market insight at the National Federation of Builders and the House Builders Association, said the homes cash was welcome news for the construction industry.
“This is fantastic news. It shows that the government realises it must be a key player in addressing the housing crisis and building the social homes of tomorrow,” he said.
“This decision benefits stakeholders across the industry. From contractors, who will deliver the social and affordable homes for councils, and housebuilders who have seen a drop-off in housing associations purchasing their affordable homes, to Homes England, who are tasked with increasing affordable housing supply, and councils who are struggling to fund projects due to rising construction costs and viability challenges.”
The announcement comes after the chancellor announced the government will invest £14.2bn in building the Sizewell C nuclear power station in Suffolk and will spend £2.5bn to build the UK’s first Small Modular Reactors.
The government has also announced a £15.6bn investment to fund extensions to trams, trains and buses in Greater Manchester, the Midlands and Tyne-and-Wear.
It has been hailed as a “vital intervention” by civils contractors.
The move followed an overhaul earlier this year of the Treasury’s rules for the allocation of public funding to ensure regions outside London and the South East were not unfairly overlooked.
The biggest beneficiary is Greater Manchester, which will see £2.5bn injected into projects including improvements to its Metrolink tram network, with new stops in Bury, Manchester and Oldham and an extension to Stockport
The package has been welcomed by civils contractors to boost growth and recalibrate the UK economy.
Alasdair Reisner, chief executive of the Civil Engineering Contractors Association, said action to redress the historic imbalance in infrastructure investment to give every region a fair hearing was “long overdue”.
“This announcement is a clear signal that the UK government recognises the key role infrastructure plays in driving inclusive economic growth and providing opportunity for communities that have for too long been left behind,” he said.
Clive Feeney, group chief executive of LHC Procurement Group, added: “Frameworks have never been more crucial – ensuring that local authorities get trusted contractors, who can deliver the right work, for the right price. Success in social housing is all about getting the process right.”
An additional £420m has been earmarked for Sheffield Forgemasters to support job creation and secure manufacturing capacity.
More to follow.
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Nicola Harley