Angela Rayner is expected to deliver a “public housing revolution” after receiving almost £1 billion in next week’s Budget.
The Deputy Prime Minister plans to double the number of council buildings after securing grants to finance tens of thousands of extra homes.
Ms Rayner says council housing is essential to meeting Labour’s target of building 1.5 million homes, with the money seen as a down payment on much larger sums in next spring’s spending review.
He believes the homes will help prevent a projected £9 billion rise in the benefits bill and cut the cost of temporary accommodation for homeless people, which is driving local governments into bankruptcy.
The Budget will also announce Rayner’s clampdown on right-to-buy rules, meaning existing council tenants will also have to pay tens of thousands of pounds more to own their homes.
Angela Rayner (pictured) plans to double council house building after winning grants to fund tens of thousands of extra homes
Ms Rayner says council housing is essential to meeting Labour’s target of building 1.5 million homes (file photo)
This will be done to curb council house sales, which Ms Rayner says is crucial to stemming the loss of social housing.
Although around 11,000 council or housing association houses are built in England each year, 23,000 are demolished or rebuilt, representing a net loss of more than 11,000.
Ms Rayner is promising to build enough council houses to stem this loss by April 2026, and Chancellor Rachel Reeves has agreed to top up her budget by between £500m and £1bn.
The money will go towards the cash-strapped Affordable Homes Program, which Rayner feared could result in construction of key projects being halted if not completed.
She is then expected to press Ms Reeves for billions of pounds at the spending review next spring, where a multi-year affordable housing program will be set.
This program hopes to return building rates closer to those achieved under Gordon Brown, when more than 30,000 social homes were built each year.
Housing campaign groups warn that 90,000 new social homes are needed a year, but many believe this level is unrealistic.
A senior government source said: “Angela’s social and council housing ambitions have the full support of the Prime Minister and Chancellor, and this will become even clearer in the coming weeks. They are joined at the hip when it comes to building Britain.
To combat record levels of homelessness, local governments are spending more and more on temporary housing.
According to analysis by the Center for the Impact of Homelessness, this costs taxpayers £1.9 billion a year, and for some councils the costs per household exceed £100,000 a year.
Ms Rayner promises to build enough council houses to stem this loss by April 2026
Chancellor Rachel Reeves (pictured) agreed to top up Ms Rayner’s budget by between £500m and £1bn
For some local authorities, these costs are straining their finances, with Crawley, Hastings and Dartford spending more than half of their council tax revenue on temporary accommodation.
Hannah Dalton, of the District Councils Network, said the costs of homelessness were “straining our budgets to breaking point”.
She continued: “Residents will be shocked to learn that as much as half of their council tax is spent on temporary accommodation rather than the local services they expect.”
The UK also now spends £30 billion a year on housing benefits, a 50 per cent increase since Labor was last in power, and this figure is expected to reach £39 billion by the end of the decade.
Polly Neate, chief executive of housing charity Shelter, said: “It is absurd that every year we sink billions into dismal homeless accommodation and line the pockets of private landlords with housing benefits, rather than investing in solutions that ensure families are housed safely and securely.” safe house.
The government source added: “Housing benefit costs are rising incredibly fast and will rise by a third if we do nothing. This is what happens if you don’t invest in social housing.
Ms Rayner is expected to reduce Right to Buy discounts which offer council tenants to up to 70% off the purchase price.
They are currently capped at £102,400, or £136,400 in London, but discounts are currently expected to be around 25 per cent.
Ms Rayner is likely to limit the right to buy to people who have lived in the house for ten years (compared to three), and is considering scrapping it for newly built homes.