Budget to include £1bn for social and affordable housing

**Budget to include £1bn for social and affordable housing**

Chancellor John Healey is due to deliver his first Budget on Wednesday.

The Budget will set aside more than £1bn for social and affordable housing in England, pushing funding for the government’s 10-year homes programme beyond £40bn.

Mayors and regional leaders across England are also expected to receive more powers and funding in Wednesday’s announcement, with councils being helped to borrow from the government for housebuilding at preferential interest rates.

The aim is to give regional leaders greater flexibility and authority over investment choices.

Chancellor John Healey said English cities and regions would gain the "right to decide their own future", while Prime Minister Andy Burnham said the measures were about transferring power to those "who know their communities best".

The chancellor will also unveil extra support for small breweries, with the Treasury saying he wants "to turn the tide for our pint producers".

Detailed information on the funding will be set out in next year’s spending review.

However, shadow chancellor Andrew Griffith has said Healey should resign if he does not explain how the UK will spend 3% of GDP on defence by 2030.

Under the regional plans, the government will next year provide an initial £285m in transitional seed funding to support mayors and local leaders, and to cut dependence on "fragmented bidding pots" in Whitehall, the Treasury said.

The government will also say it will work with mayors to create a new £1.5bn borrowing facility from 2028, giving them access to capital to back local priorities.

The Treasury said this could be used for new homes, reviving high streets, or improving transport links.

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 around the country that are not yet strategic authorities will be able to access part of the £285m funding to "unlock projects which will contribute to growth in their areas".

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."

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" for communities.

Lord Sadiq Khan, Labour’s mayor of London, said greater investment powers 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.

But Healey’s Budget preparations were dealt a setback when the Treasury’s entrepreneurship adviser, Alex Depledge, said she was resigning from the role. She will depart on Thursday, the day after the Budget.

, were being treated as a "sideshow" and should not be pushed to the "margins of economic policy".

"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," she said.

In the run-up to the Budget, defence has also remained a major issue. Healey resigned in June from his post as defence secretary in the previous government over the defence investment plan

, which he said fell "well short" of what was needed to fund the armed forces.

He had argued that defence spending should rise to 3% of the country’s GDP by 2030, on the path to a Nato target of 3.5% in 2035.

But pressing him to commit to setting out plans to spend 3% of GDP on defence, the shadow chancellor 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".

In response to Andrew Griffith’s remarks, Defence Secretary Wes Streeting said the Conservatives were responsible for failing to invest in the military while in power.

Streeting said the prime minister had made clear that his government was "determined to give our armed forces the investment needed to keep us safe".