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Published: 05/08/2026
Proposals to give English mayors and local authorities greater control over funding, planning and regeneration could strengthen their capacity to support housebuilding, but their impact will depend on long-term funding certainty, sufficient delivery expertise and clear arrangements for implementing the new powers.
Under the new government model, English mayors are expected to be equipped to support the building of council homes, including through greater devolution of the Social and Affordable Homes Programme(1).
Mayors will also reportedly receive a share of local income tax in place of some central government grants while local councils and strategic authorities would retain a greater share of revenue from business rates. The government intends these changes to provide greater funding certainty and flexibility, supporting investment in interventions that will deliver a return.
On top of this, local leaders are to be given stronger planning and regeneration powers and more devolved funding to unlock stalled development and build new homes.
Responding to the announcements, BCIS chief economist Dr David Crosthwaite said the reforms could be a significant step towards rebuilding local government’s capacity to deliver homes, but cautioned that predictable funding and the expertise to use new powers to complete projects remain essential to improving housing supply.
‘Rising costs and regulatory pressures have not disappeared, and clarity is still needed on how the new powers will work in practice. If the reforms provide genuine long-term financial certainty rather than simply transferring responsibility, they could help restore local government as a major housebuilder and accelerate national housing outputs in turn,’ he said.
Housing delivery by local authorities has remained well below that of private developers and housing associations since the 1980s. However, the latest provisional data from the Office for National Statistics (ONS) indicate an increase in local authority completions.
Local authorities completed 1,550 homes in the UK in the first quarter of 2026, the highest quarterly total for more than 30 years. This was 54% higher than in the first quarter of 2025 and above the quarterly average of 1,050 recorded since available data resumed in the second quarter of 2022.
‘The latest provisional ONS figures offer grounds for cautious optimism and suggest local government can still play a much greater role in housing delivery, although one strong quarter does not yet amount to a sustained recovery,’ Dr Crosthwaite added.
Other proposed measures under the reforms include strengthening the framework for public development corporations to support local housing and infrastructure development. The changes would also remove the requirement for government approval of locally funded transport schemes in places with integrated settlements.
The government is expected to publish further details and an implementation timetable of the reforms alongside the Autumn Budget and a roadmap for fiscal devolution.
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(1) GOV.UK – Rewiring the State – Cabinet Statement (HTML) - here
