Prime Minister Andy Burnham’s ambition to deliver the biggest council housebuilding programme since the postwar period could fall short without a further £7 billion, according to new analysis from the New Economics Foundation (NEF). The warning follows Chancellor John Healey’s announcement of an additional £1.5 billion for social and affordable housing in the October Budget. The £7 billion is an estimate of extra investment needed to meet the think tank’s proposed scale of construction, not missing money from an existing Government allocation.
NEF calls for more investment
The analysis, reported by The Independent on 31 October 2026, estimates that current plans would deliver around 18,000 social homes a year over the next decade. NEF, Shelter and Crisis argue that England needs approximately 90,000 new social homes annually. NEF proposes adding £7 billion to the Social and Affordable Homes Programme at the next spending review and bringing spending forward. It projects that this could support more than 100,000 new council and social homes by 2030 and a path towards 90,000 annually by 2032–33. These are modelling estimates, not Government commitments.
Government programme exceeds £40 billion
The Government’s 2026–36 Social and Affordable Homes Programme was originally announced with £39 billion of funding. Its published ambition is around 300,000 social and affordable homes over ten years, at least 60% for social rent. The October 2026 Budget added £1.5 billion, which the Government says will support approximately 10,000 additional homes, taking the overall commitment above £40 billion. The Government also plans preferential borrowing arrangements for councils.
Council building compared with the past
Figures cited in NEF’s analysis suggest English councils built an average of about 103,000 homes a year at the 1970s postwar peak, compared with roughly 2,000 a year in the five years to 2025. The comparison concerns council construction specifically; the wider social and affordable housing programme includes homes delivered by housing associations and other providers.
Housing charities seek faster delivery
Shelter welcomed the Budget increase but said further investment and reform of council housing debt are needed. Crisis similarly called for an accelerated programme of social rent construction. Their proposed 90,000 homes a year is an assessment of housing need, not a binding Government annual target.
Conservatives question the costs
Shadow housing secretary Katie Lam challenged the Government to explain how further construction would be funded and argued that additional spending could mean more borrowing or taxation. These are opposition criticisms, not findings of the NEF analysis. The Centre for Cities also noted that construction at the promised scale would require both funding and difficult regulatory choices.
OBR raises separate funding questions
The Independent also reported an Office for Budget Responsibility estimate that returning council building towards 1980s levels would require at least 22,000 additional homes each year at an annual cost of £3 billion to £4 billion. This is a separate scenario from NEF’s £7 billion proposal and should not be added to it as if both were the same funding gap.
What happens next?
The next spending review will provide a key test of whether ministers increase funding for social housing. Actual delivery will also depend on land, planning, infrastructure, construction capacity and the finances of councils and housing associations. NEF’s analysis raises questions about the scale of the existing programme, but it does not establish that the Prime Minister’s pledge will fail.