Mayors given new powers to harness ‘untapped and waste’ potential of England’s cities

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”.

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