Committee publication · Estimate memoranda · 29 April 2026

MHCLG 2026-27 Main Estimates Memorandum

From: Housing, Communities and Local Government Committee

Summary

MHCLG's 2026-27 Main Estimates memorandum outlines the department's spending plans totalling £62.6bn across resource and capital budgets. The department's priorities are building affordable homes, modernising local government, and driving economic growth. Key changes include £4.6bn additional Local Government funding, £1.5bn capital increases, and new budgets for the National Housing Bank (£711m) and local authority debt support (£700m).

Key findings

Communities Resource DEL decreased by £534m (11%) to £4.2bn, primarily due to funding simplification transferring £1.4bn to Local Government DEL, offset by £1.4bn for expanded Integrated Settlements (from 2 to 7 mayoral authorities).
Local Government Resource DEL increased by £4.6bn (33%) to £18.4bn, driven by consolidation of grants from other departments (£2.7bn), reclassification of business rates reliefs from AME to DEL (£3.2bn), and Rough Sleeping Prevention grant transfer.
Capital DEL rose by £1.5bn (17%) to £10.3bn, with major increases in Integrated Settlements (£1.2bn), National Housing Delivery Fund (£325m grant, £120m financial transactions), and property/digital investment (£38m).
New Capital AME budget of £1.4bn introduced for National Housing Bank implementation (£711m) and local authority debt repayments (£700m), reflecting changed delivery mechanisms.
Resource AME increased by £3.1bn (12%) to £28.3bn, driven by business rates transactions including £1.4bn relief grants, £853m transitional protection, and £523m local share retained by authorities.

Tone

Procedural

Topics

public-financehousinglocal-governmentcapital-investmentbuilding-safety

Key actors

Ministry of Housing, Communities and Local Government (MHCLG), Homes England, Greater London Authority, HM Treasury, National Housing Bank, Building Safety Regulator, Local authorities, Sarah Healey (Accounting Officer and Permanent Secretary)

Notable line

“The Government confirmed a new 10-year £39 billion Social and Affordable Homes Programme 2026-36 at Spending Review”

Key Quotes

“MHCLG 's priority outcomes are as follows: 1. Build a country where everyone has access to a safe, affordable and decent home. 2. Create places with modernised local government, sustainable public services and high-quality infrastructure. 3. Shape an economy that delivers tangible growth everywhere and for everyone.”
— MHCLG · Department's stated strategic objectives for 2026-27

“The overall reduction against the final spending plans in 2025-26 is predominantly due to significant budget transfers of £1,375m out from Communities RDEL to LG RDEL”
— MHCLG · Explanation of Communities Resource DEL decrease

“The National Housing Delivery Fund (NHDF) programme focuses on delivering net additional homes, prioritising social rent and areas of highest housing need, and enables delivery partners to unlock sites and bring forward housing through targeted, place-based investment.”
— MHCLG · Description of NHDF major project objectives

“The NHDF has been allocated c.£18.6 billion of capital capacity, comprising c.£5.1 billion of CDEL Grant, up to £8 billion of CDEL Financial Transactions, 18 and £5.5 billion of housing guarantee capacity.”
— MHCLG · NHDF funding allocation breakdown

“This portfolio is in place to bring all affected residential buildings over 11 metres high with unsafe cladding to the minimum life-safety standard quickly, completely, proportionately and consistently.”
— MHCLG · Remediation Portfolio objective for building safety

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Source · parliament.uk record ↗