Burnham backtracks on spending housing fund only on building social homes

About 40% of £10bn from Affordable Homes Programme will now go on types of housing such as sheltered and shared ownership

Andy Burnham has backtracked on his proposal to rip up the government’s housing plans and boost social home building.

Ministers laid out plans on Monday to spend an initial £10bn from the 10-year Affordable Homes Programme on a mix of subsidised housing types in England, in line with the Starmer government’s policy.

Burnham previously called for the programme to be spent entirely on social homes, which are more heavily subsidised and therefore more affordable than other types of government-funded housing.

He said when launching his campaign to become MP for Makerfield: “There’s £39bn allocated over a 10-year period … I’m saying that should be dedicated to council homes. Let’s not be coy any more … I’m saying council homes because control matters.”

Under the plans announced on Monday, however, £10bn will be spent helping to build 70,000 homes outside London, about 60% of which will be social rented houses. The rest will be other types of accommodation such as shared ownership schemes and sheltered housing.

London will get another £6bn, which will be allocated at a later date.

Ministers said the investment would help bring the government closer to its promise of building 300,000 affordable homes over the next 10 years. It will be spent by 33 “strategic partners”, who will be guaranteed funding for the next decade to help deliver their plans.

The Guardian has learned that for the first time in the history of the scheme, three of those partners will be local councils, as the government looks to deliver what Burnham has promised will be “the biggest council housebuilding programme since the postwar period”.

Angela Rayner, the housing secretary, said: “Growing up on a council estate and raising children as a young working mum, I know firsthand that access to a secure, affordable home can be a lifeline for families up and down the country.

“Guardian readers will know just how important council housing is too. You will know it’s so much more than just a roof over your head – it gives working parents a safe place to raise their family, offers kids the stability needed to thrive in school and wraps a community around those who need it most.”

She added: “This once-in-a-generation investment will help rewrite these stories, delivering the genuinely affordable homes our country needs, getting people off waiting lists and helping families put down roots so they can get on in life.”

Officials say that another £16bn is yet to be allocated, and that social rent homes and council houses will be prioritised in future funding rounds.

Sarah Elliott, the chief executive of the charity Shelter, said: “Today’s announcement puts councils back on the pitch in the fight to end homelessness. By giving local authorities some of the funding and support they need to start delivering social homes at scale again and ramping up the percentage of funds allocated to social homes, the government has laid the foundations for its council housing revolution.

“But there are still underlying obstacles which hold councils back from building. The government must use the autumn budget to finally remove these barriers, like unsustainable housing debt that councils are saddled with, to make the prime minister’s vision of a new generation of social homes a reality.”

The plans contrast with those announced by Reform UK on Monday, which is promising to boost the supply of social homes by evicting foreign tenants and allowing housing associations to borrow more.