Spring Statement highlights Autumn to do list

Posted: March 4, 2026 | Author: julesbirch | Filed under: Council housing, Homelessness, Housebuilding, Local government, Temporary accommodation |Leave a comment

Originally written as a column for Inside Housing

There were by choice no policy announcements in the Spring Statement but the message about the government’s housing priorities could hardly have been clearer.

Chancellor Rachel Reeves had deliberately downplayed the significance of the statement, which was meant to be an update on the public finances rather than a full-blown Budget.

That meant that – with one exception – there were no background documents to wade through to find hidden announcements and hints about future policy direction.]

The exception came from the Office for Budget Responsibility (OBR), and the first message was about the key manifesto target of 1.5 additional homes in this parliament. 

Not a chance, says the OBR’s Economic and Fiscal Outlook: in the five years from 2025/26 to 2030/31 the independent watchdog forecasts there will be just 1.3 million net additions across the UK (30,000 higher than it forecast in November).

Net additions will fall in line with subdued recent housing starts to just 220,000 in 2026/27, it says, but then rise sharply to just over 305,000 by 2030/31 ‘reflecting the impact of planning reforms’.

That may sound closer than we thought to 1.5 million and the government will welcome the acknowledgement of the impact of its policies.

But eagle-eyed readers will already have spotted that the target is for England whereas the forecast is for the UK and that they cover different time periods.

Adjusting for homes built in Wales, Scotland and Northern Ireland only increases the size of the shortfall: England-only net additions will total around 1.1 million, 400,000 short of the target.

The latest official estimate suggests that 309,600 net additional homes were delivered in the 18 months between the start of the parliament on 9 July 2024 and 11 January 2026. 

That leaves just under 1.2 million to be built in the three and a half years left in this parliament at an implausible rate of 340,000 a year.

It is still possible that further planning reforms will boost these numbers but this means that homes are going to have to come from somewhere else if the government is to get anywhere near to meeting its target.

The most plausible candidate for this is new council housing, which could be delivered independently of the market with the right backing from central government. 

However, the OBR has an even gloomier message here.

This starts with general finances, with local authority net borrowing forecast to reach £18 billion in 2025/26.

Borrowing over the last three years has averaged £15 billion a year, almost double the level seen in the three years before Covid, thanks to the severe financial pressures on councils.

Those pressures include deficits on special educational needs and disabilities (SEND) provision and rising demand for statutory services adult and children’s social care and temporary accommodation for homeless households.

The latter was put into sharp relief by analysis released by the Local Government Association at the same time as the Spring Statement.

The LGA says that since 2017/18 councils have spent £1.5 billion more on temporary accommodation than they got back in central government support, which is capped at 90 per cent of Local Housing Allowance rates from 2011. 

But, without intervention, it says that the deficit will increase to £3.9 billion by 2029/30. 

Added to that, the OBR also highlights a sharp deterioration in financial positions of many Housing Revenue Accounts (HRAs). 

This will not be news to housing professionals working in local authorities but it seems significant that the watchdog has chosen to highlight both the sharp increase in costs after the pandemic and the impact of caps on rents since the mid-2010s.

The OBR says that: ‘Across local authorities, HRA spending on repairs and maintenance increased by 56 per cent between 2019/20 and 2025/26, while rental income increased by only 29 per cent. Many HRAs are effectively loss-making and many councils have been required to sell housing stock, borrow or seek EFS [Emergency Financial Support] to remain compliant with the legal requirement not to run a long-run deficit on the HRA.’

This is a much worse than its assessment after the Budget in November, when it warned of the risk of HRAs ‘becoming unprofitable’.

The government has taken steps since then to support local government in general through changes to SEND and the Fair Funding Review.

It has also boosted council housing with changes to the Right to Buy, rent convergence and allowing councils with no retained stock to build outside the HRA.

However, councils are ineligible for £2.5 billion of 0.1 per cent loans that are available to housing associations including for-profits and have to borrow far more expensively from the Public Works Loans Board.  

More action will clearly be needed just to stop the finances of local authorities deteriorating even further, let alone enable them to play a full part in boosting housing supply.

The chancellor deliberately announced no new policies in her Spring Statement but that would be a good place to start in her full Budget in the Autumn. 

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