Government to Spend £1bn on Housing, Devolve Powers, and Maybe Finally Fix the Potholes
The government is throwing £1bn at housing, devolving powers to mayors, and supporting small breweries - because nothing says 'fixing the housing crisis' like a pint.
In a move that will surprise absolutely no one who has ever tried to rent a flat in England, the government has announced that Wednesday's Budget will include more than £1bn for social and affordable housing. This takes total funding for the government's 10-year homes programme past £40bn - a number so large it's almost enough to make you forget the housing crisis is still very much a thing.
Mayors and regional leaders across England are also expected to get greater powers and funding, because apparently, the people who actually live in a place might know a thing or two about it. Councils will be helped to borrow money from the government to invest in housebuilding through preferential interest rates, which is a fancy way of saying they'll get a slightly less terrible deal than usual.
Chancellor John Healey said English cities and regions would get the "right to decide their own future," while Prime Minister Andy Burnham said the plans were about shifting power to those "who know their communities best." A novel concept, indeed.
The chancellor will also announce more support for small breweries, with the Treasury saying he wants "to turn the tide for our pint producers." Because if there's one thing a country needs in a housing crisis, it's affordable ale.
Meanwhile, the Sunday Times reports that Healey is expected to unveil billions of pounds of new defence spending in the Budget. Specific details will be outlined at next year's spending review - a classic move for anyone who wants to announce big numbers without actually committing to them.
But shadow chancellor Andrew Griffith has called for Healey to resign if he fails to set out how the UK will spend 3% of GDP on defence by 2030. Griffith said: "We are living in an era of extraordinary threats, and yet the chancellor is dithering over finding the money to pay the country's insurance premium... you cannot have a strong economy without a strong defence." Defence Secretary Wes Streeting responded by blaming the Conservatives for failing to invest in the military while in office, because of course he did.
Under the regional plans, an initial £285m in transitional seed funding will be allocated by the government next year to support mayors and local leaders - and reduce reliance on "fragmented bidding pots" in Whitehall, which is bureaucratic speak for "stop making local councils beg for scraps."
The government will also confirm that it will work with mayors to design a new £1.5bn borrowing facility from 2028, allowing them to access capital for local priorities. The Treasury said this could be put towards new homes, bringing high streets back to life, or improving transport links - basically, the things local leaders have been asking for since forever.
Healey said: "Mayors and local leaders know what their communities need to grow, which is why we are giving them more money, more power and more capacity to get projects moving, build homes and make the right decisions for their areas." Areas not yet strategic authorities will also be able to access a share of the £285m funding to "unlock projects which will contribute to growth."
The prime minister said: "I'm calling time on local leaders going cap in hand to Westminster. That is no way to run a country." A sentiment that will surely be tested when those same local leaders actually try to spend the money.
Claire Ward, chairwoman of the UK Mayors Network and Labour's East Midlands mayor, said having the "right powers and resources through increased devolution" would help turn "ambitious plans into reality and deliver real, lasting change." Lord Sadiq Khan, Labour's mayor of London, said greater ability to invest could "help unlock transformational infrastructure projects" including the West London Orbital route, the extension of the Bakerloo Underground line and Docklands Light Railway, and the development of Stratford International station - projects that have been talked about for so long they might as well be classified as ancient history.
However, Healey's Budget preparations suffered a blow when the Treasury's entrepreneurship adviser, Alex Depledge, announced she was resigning from the role. She will leave on Thursday, the day after the Budget. Start-ups, she told the Sunday Times, were being treated as a "sideshow" and should not be pushed to the "margins of economic policy." She said: "Keeping scale-ups on the fringes underestimates the contribution of our greatest companies, and we need to support and develop them on British shores at all costs." Nothing says "pro-business" like your entrepreneurship adviser quitting the day after your big announcement.
Leading up to the Budget, defence has also remained a key talking point. Healey resigned in June from his role as defence secretary in the previous government over the defence investment plan, which he claimed fell "well short" of what was needed to fund the armed forces. He had called for defence spending to rise to 3% of GDP by 2030, on the way to reaching a Nato target of 3.5% in 2035. Now he's the one who has to find the money - poetic justice, or just irony?
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