CIH submission to Autumn Budget 2026

Our number one priority is to build and retain more social housing. At a time of tight public finances, we believe investment in social housing can deliver multiple policy objectives at once, helping government address the interconnected challenges of public control, community regeneration and the cost of living, while providing secure, affordable homes for those who need them. 

Social rented housing is the most affordable form of housing and can significantly ease cost of living pressures for low-income families otherwise forced into the private rented sector. Long term secure tenancies also provide the stability required for families to plan their work, education and other elements of their lives and, by working with both strategic and local authorities, can significantly contribute to community regeneration.  

The Social and Affordable Homes Programme (SAHP), launched in April, represents the most significant investment in social and affordable housing in a generation. The need for this funding and the homes it will deliver is clearly demonstrated by the large number of bids received by Homes England and the Greater London Authority. We welcome the ambition of the SAHP and recognise the significance of this investment as a statement of intent for social housing delivery in England. The first round of successful bids for strategic partnership funding has now been announced, unlocking delivery of thousands of new homes by housing associations and local authorities. CIH welcomes the first wave of funding, particularly with a focus on social rent and the support for council housebuilding. 

To maintain momentum and deliver on the government’s social housing ambitions, we recommend that additional funding is provided for the SAHP and that this is front-loaded to ensure progress can be made on delivery of the government’s social housing ambitions in this parliament. Bringing forward more funding into the early years of the programme would deliver more homes more quickly, saving money on temporary accommodation, reducing council waiting lists and giving more families a stable home of their own. It would also ensure that there is enough funding to meet demand for Continuous Market Engagement (CME) – another vital funding route for social housebuilding for councils and smaller housing associations.  

To align with the government’s ambition to go further and faster with regional devolution in England, and to support the role of mayoral strategic authorities (MSAs) in delivering social and affordable homes, we believe there is a strong case for starting to devolve the agreed SAHP allocations for Established Mayoral Strategic Authorities (EMSAs). EMSAs are already helping to set the strategic direction of the SAHP in their areas but this can go further. Whilst we acknowledge the need for strategic authorities to develop the right level of capacity and expertise to manage a large programme of social and affordable housing, which may take some time for the newer and smaller authorities, Greater Manchester Combined Authority and West Midlands Combined Authority have demonstrated the ability to deliver sustained investment in housing and infrastructure in strategic locations, in collaboration with local authorities, housing associations and other partners. We therefore recommend that Homes England work with these two EMSAs to fully devolve their share of the funding as soon as possible, and that they are used as pilots for issues to be reviewed and resolved – with lessons to be learnt for future phases of devolution as other MSAs develop.  

The SAHP represents a significant element of the government’s investment in social housebuilding. However, the government has also committed to increasing the number of new homes delivered directly by local authorities. CIH welcomes this commitment to enhance the role of councils in social housing, as we have long called for. Over recent years the number of new social homes provided directly by local authorities has increased significantly and in 2024/25 over 10,000 new council houses were delivered, the highest figure since the early 1990s. However, there are significant barriers to this number rising to the heights of the post-war era, when councils built upwards of 100,000 homes a year.  

Local authority housing and planning departments have been severely affected by budget cuts over the last 15 years, and many councils are experiencing staff shortages. Only around half of all lower-tier and unitary authorities in England have Housing Revenue Accounts (HRAs) or recent landlord experience, while many HRAs are heavily indebted, stifling the potential for councils to build more homes. Changes to the HRA self-financing settlement assumptions made by previous governments on rent policy and the right to buy, alongside increased expectations on housing quality and energy efficiency, mean many local authorities are now faced with unsustainable HRA debt levels.  

Given the government’s ambition for council house building, we believe the time is now right for government to review and amend the self-financing settlement, putting it back on a sustainable footing for much-needed investment in both existing and new council homes.  

Shelter recently published analysis on HRA debt by Savills, which builds on earlier work with CIH in 2024 to look at an updated debt settlement. Savills conclude that “there is little or no capacity to support the ability for local authorities to contribute meaningfully to the government’s target of 1.5 million new homes and therefore to enhance the delivery of social rent homes.”  

We believe there is an urgent need for HRA debt to be looked at, including options for a targeted programme of HRA debt relief to unlock borrowing capacity, accelerate delivery and enable councils to make a stronger contribution to meeting housing need. We are therefore calling for the Treasury, MHCLG and potentially Number 10 North to be tasked jointly with exploring how the debt could be treated and council housebuilding rejuvenated. The review should meaningfully engage with councils and tenants as well as sector experts at the earliest opportunity to ensure that key stakeholders' concerns and aspirations are fully understood and that lessons from the past are learnt. This would provide the evidence base and understanding for the next Spending Review.  

A further barrier to increasing council housebuilding is the high cost for local authorities of financing development. The National Housing Bank, launched earlier this year, is a welcome innovation and provides registered providers with access to low interest loans to support development. However, these loans are not currently available to local authorities. We encourage government to review the terms of these loans or those offered to councils via the PWLB for house building so that local authorities can access similarly low interest rates.  

The government has recently acknowledged the problem of a loss of social housing via disposals by housing associations and has a clause in the Social Housing Bill to create a window for local authorities or other RPs to register interest in a property before it goes on sale to the wider market “to ensure, where possible, stock is retained within the social housing sector”.  

CIH is supportive of this proposal but does not think that the current timescale is long enough and that this means the measure may not be enough to prevent sales outside of the sector. We believe there needs to be better long-term partnership working and much earlier engagement between RPs and councils to allow time for proper consideration and finances to be arranged. We are calling for both a longer timescale and guidance on earlier consultation to help that process. However, from speaking to our members, we are also concerned that councils and smaller, local RPs do not have sufficient funding to enable them to buy these properties at market value as well as doing the necessary works to bring them up to the new decent homes’ standard, including good energy efficiency.   

Local and strategic authorities have an important role to play in working with developers to identify sites, assemble land and create infrastructure that supports communities’ housing needs and regeneration. It is crucial that they have a clear, accurate and timely picture of where social housing is being sold into the private market and the ability to purchase it if necessary. This is particularly important in rural areas. Rural areas have a greater proportion of older stock than urban areas and social housing in rural areas is at greater risk of disposal. In addition, developing new affordable and social homes in rural areas is often more costly, time consuming and faces more planning obstacles than elsewhere.   

To enable councils or other RPs to buy these properties where appropriate we are asking the government to designate a fund that would bridge the gap between the existing use value for social housing (at social rent level) and an independently assessed open market value for these homes - effectively providing grant to purchase them and make the purchase viable. This would enable the RP to sell their property at full market value so there is no constraint on their independent asset management decisions, but the buyer - a council or another RP – would only have to find the existing use value portion, with the government funding covering the rest. This should work well alongside the mandatory notification and waiting period in the Bill, giving councils a realistic financial route to act within that window, rather than more time but no way to afford to use it. The fund could be targeted for rural social housing, areas with demonstrated high need in their own housing strategy, and adapted or Disabled Facilities Grant funded properties. We would be happy to work with government and local authority sector stakeholders to help develop a workable programme.  

CIH welcomed the National Plan to End Homelessness at the end of last year and welcomes the Prime Minister’s pledge to end rough sleeping. Local authorities, housing associations and supported housing providers are ready to support the Prime Minister in his goal, but they need the resources to deliver statutory services and ongoing support, and to work together in effective local partnerships to provide stable, good-quality housing. We detail below our specific fiscal asks to help end homelessness.  

The most effective lever the government has to prevent people becoming homeless is to increase Local Housing Allowance (LHA) to at least 30% of market rates, as the policy was designed.  

LHA was last reset in April 2024. Since then, rents have risen fast, widening the gap between support provided and actual costs. Over half (54%) of LHA claimants now face a shortfall, putting pressure on the cost of living and increasing the risk of problem debt and homelessness. Restoring LHA to the 30th percentile would cost around £300 million this year (from April 2026), but annual uprating is essential to keep support aligned with actual rents and household budgets and to avoid housing more people in costly temporary accommodation (see below).  

By April 2025, only around 20% of properties in England were affordable within LHA rates. Today, the median shortfall for a two-bedroom home is around £100/month, around 80% higher in real terms than at end of the previous freeze. This is increasing rent arrears, displacement and homelessness, while limiting the potential for people to move on from temporary accommodation. 

If this solution is deemed unaffordable at the present time, we would urge the government to increase targeted financial support in the form of the Crisis and Resilience Fund so that local authorities are able to use that to make up shortfalls in LHA rates in their areas and prevent homelessness or provide a route out of temporary accommodation that would be impossible without such gap funding.   

Over the last two years, the government has made significant efforts to address the homelessness crisis - the National Plan to End Homelessness, £950 million invested into improving temporary accommodation, significant improvements in reducing the number of families in B&B accommodation and, in recent weeks, an additional £442 million package to support people into settled homes.  

However, government spending on temporary accommodation in 2024/25 reached £2.8 billion. With housing benefit (HB) subsidy rates frozen since January 2011, local authority budgets are increasingly being used to fund the shortfall, with a knock-on effect on other local services. We therefore urge the government to restore the temporary accommodation subsidy rate to 90% of the LHA rate and uprate the national caps which force many London councils to make out of area placements.  

Excessive profiteering, from a market seeking to benefit from this crisis, is embedded into the current TA system. Without urgent action to address both the unintended consequences of the current funding model as well as the expectations of standards, safeguarding and outcomes that should be delivered by providers in receipt of public money, this sector of the housing market will continue to attract unsuitable landlords.  

Supported housing can be a critical route back into independent living for people who have experienced a crisis such as homelessness or domestic abuse. In the light of increasing homelessness, appropriate and affordable supported housing supports those with shorter as well as longer-term needs. As the government has acknowledged, support – as well as bricks and mortar – is important to address the most complex forms of rough sleeping. Supported housing is home to over 634,000 people across Great Britain to live independently in their communities, including housing for older people, for those with lifelong learning and physical disabilities, and for those living with mental health issues. Additionally, around a fifth of the sector supports those in short-term or transitional accommodation, such as those experiencing homelessness or fleeing domestic abuse.  

Despite its importance, the supported housing sector is struggling. A third of not-for-profit supported housing providers closed schemes in recent years, with one-in-ten of those remaining at risk of closure. Investing in supported housing reduces the burden on health and social care services and supports people to live well in their own homes. Evidence shows significant fiscal and prevention benefits: supported housing helps prevent or reduce homelessness for around 41,000 people, with substantial savings compared to average annual costs of around £40,000 per person. A recent report from the County Councils network highlights the steep rise in care costs to support working aged adults with lifelong conditions, with an estimated £17 billion by the end of the decade – a 50% increase on 2024. Many of these adults may be effectively supported in specialist accommodation with better outcomes for their independence, and the report calls for better links between adult social care and housing, particularly more suitable local authority housing, and greater provision of supported housing options within the government’s planning reforms and housing targets. In many areas, the options for such housing are not available for many older people; analysis by the National Housing Federation estimated a need for 38,000 more supported homes for older people a year. 

The government should swiftly implement the next steps of the Supported Housing (Regulatory Oversight) Act and urgently introduce a ringfenced funding stream for housing-related support to secure existing provision and enable the development of new supported housing. Investing in supported housing will reduce the burden on health and social care services and is fundamental to the delivery of “a preventative and productive state”. To align with the government’s agenda and promote place-based policy, the funding should be devolved to EMSAs where they exist as part of their integrated settlements.  

Overall, there has been a steady improvement in housing conditions in recent years, particularly in the social rented and owner occupation sectors. However, future considerations of decency must take account of the changing nature of the UKs population (with more people ageing and living longer with life limiting conditions) and changing climate and environmental factors. The UK has the oldest housing stock in Europe, and therefore significant and ongoing challenges to ensure existing homes are well maintained and contribute to population health and wellbeing. CIH would like to see further action by government to address these outstanding issues.  

The 1997-2010 Labour government was responsible for substantial improvements in social housing quality in the 2000s, which in social housing was driven by the ambitious Decent Homes Programme. However, progress in improving quality has recently stagnated, with a recent report by the Housing, Communities and Local Government (HCLG) Committee concluding that social housing quality in particular has barely improved since the Covid-19 pandemic. The gradual erosion of financial capacity in the social housing sector over the last decade has been the core driver of this stagnation, with analysis by CIH and Savills showing that the (re)introduction of rent convergence will not be sufficient to meet the government’s goals around improving housing quality without slowing the building of new social and affordable homes.  

For social housing, the government is introducing a new Decent Homes Standard, and the new administration has an opportunity to eradicate poor quality social housing by the mid-2030s. To do this, the government should introduce a new, modernised programme, which could be called the Healthy Social Homes Programme. To ensure that this programme is designed around place-based principles, it should be fully devolved to mayoral strategic authorities where they are in place. The English Devolution and Community Empowerment Act introduces a new requirement for strategic authorities to have regard for public health across all policy areas, and act to reduce health inequalities. The introduction of this duty provides potential to bring together partners across local authorities, social housing providers and health bodies to embed health in housing policy. In Greater Manchester, this approach is working effectively through, for example, its Home from Hospital services which support patients leaving hospital who require extra support in their home. 

The government has stated its intention to publish a fiscal devolution roadmap and accompanying white paper alongside the Autumn Budget. We look forward to seeing further detail on how further fiscal devolution will be implemented, but welcome the broad direction of travel in providing mayors and strategic authorities with more resources to implement the policies on which they were elected. Fiscal devolution has the potential to augment the significant new housing and planning powers provided to mayoral strategic authorities and contribute to the delivery of new homes. We encourage government to commit to the following principles in designing fiscal devolution, to ensure that any new fiscal powers are delivered sustainably and with sufficient accountability measures.  

1. MSAs should benefit when they take difficult decisions to be ambitious about delivering new homes. The government’s proposal to allow MSAs to retain a percentage of local income tax receipts provides an incentive for mayors to grow their populations and develop policies that will support the delivery of new homes. It is right that MSAs should derive some benefit from local growth and that increased income tax revenue can be reinvested into infrastructure and local services. 
2. MSAs should receive a guaranteed funding floor to ensure areas with weaker tax bases are not unfairly penalised. While MSAs have the opportunity to contribute to improving growth in their areas, policy must recognise that local and regional outcomes are the result of many factors, most of which are out of the control of local leaders. External shocks, decisions taken by national governments and industrial change can impact on income tax receipts. It is therefore essential that MSAs are provided with a guaranteed funding floor that is not affected by the income tax receipt proposal. 
3. MSAs should have as much freedom as possible to invest the receipts of retained income tax receipts. Retained uplift in income tax receipts should be provided to MSAs with as few conditions as possible, to ensure they can be invested in local priorities. This freedom, and the new mayoral planning powers detailed in a recent consultation paper, should be accompanied by improved accountability and transparency measures to ensure local authority councillors and the public can properly scrutinise mayoral decisions. 
4. Fiscal devolution should not affect the budgets of local authorities. While there is a strong case to review council tax and business rates (the two main taxes taken by local authorities in England), fiscal devolution to MSAs should be treated separately in this initial wave and should not affect the funding provided to councils for delivery of essential services. Any changes to local authority Core Spending Power should be considered separately.
5. Future fiscal devolution should explore the potential to reform England’s outdated property and land taxation system. In the longer-term, the government should explore replacements for council tax and stamp duty land tax, which are outdated, stifle efficient operation of the housing market and lack meaningful local and regional control.  

CIH works across the UK and draws around 25% of its membership from Scotland, Wales and Northern Ireland. Many of the pressures on the housing market, and barriers to supply and affordability, are mirrored across all four nations. Our policy calls, ahead of the Autumn Budget, are made in the knowledge that many will result in consequences for funding in the devolved nations. While it will be for the administrations leading the devolved nations to determine their priorities, we believe the measures set out here can in most cases be adapted to match needs in Scotland, Wales and Northern Ireland, and will reap similar benefits to those set out for England here.  

If you'd like to hear more about our response, please contact Tom Arnold, Policy Manager, CIH at tom.arnold@cih.org