Chancellor Rachel Reeves has used her Spending Review statement in the Commons to reveal that she will nearly double government spending on affordable housing.

And she is allowing social housing landlords to hike rents by above inflation over the next 10 years.

She says some £39 billion will be spent over 10 years for local authorities, private developers and housing associations to create social housing. This average of £3.9 billion a year is a significant increase on the £2.5 billion allocated annually under the 2021-26 programme. 

Reeves told MPs social housing had been “neglected for too long – but not by this Labour government … A new Affordable Homes Programme – in which I am investing £39bn over the next decade. Direct government funding that will support housebuilding especially for social rent, and I am pleased to report that towns and cities including Blackpool, Preston, Sheffield, and Swindon already have plans to bring forward bids to build new houses.”

Social landlords to raise rents annually by 1% above the consumer price index rate of inflation, for the next 10 years: this doubles the five year rent rise period announced by Reeves last year. 

The government is also reported to be consulting on how to implement the return of rent convergence, which allows cheaper social rents to rise more quickly to ensure alignment between rents on different properties. It had been scrapped in 2015 by a former Conservative government. 

Other announcements in Reeves’ speech – some leaked by the government in recent days – include: 

NHS: An extra £29 billion per year for “day-to-day” spending – a 3% rise for each year until the next election;

Artificial Intelligence: £2 billion spending on this as part of growth of research and development budget to £22 billion;

Law and Order: Another £2 billion to fund 13,000 extra police officers, PCSOs and special constables; £7 billion on 14,000 new prison places. 

Winter fuel: The government has partially reversed cuts to winter fuel payments, at a cost of £1.2 billion. Over three-quarters of pensioners will now get the payment;

Defence: Extra £11 billion of spending, going from 2.3% of GDP to 2.6% by April 2027, paid in part by cutting overseas aid. A pledge to increase defence spending to 3%, but without a hard date;

Asylum hotels: Housing asylum seekers in hotels will stop by the end of this Parliament in 2029; another £280m for enhanced border controls;

Schools: Core schools budget given extra £4.5 billion a year, of which half will be spent on “crumbling classrooms”, along with free school mealsexpanded to 500,000 children whose parents get Universal Credit, regardless of income;

Nuclear power: Government will invest £14.2 billion building the Sizewell C nuclear power station plus some smaller modular reactors;

Transport: £15.6 billion invested in trams, trains and buses in Greater Manchester, the Midlands, Tyne-and-Wear and the Oxford-Cambridge link;

Bus Fares: Capped at £3 outside of London until at least spring 2027;

Science: Some £86 billion to fund research into drug treatments and ‘green’ longer-lasting batteries.

Reeves says: “My driving purpose since I became Chancellor is to make working people, in all parts of our country, better off. So at the Budget last October and again in the spring, I made the choices necessary to fix the foundations of our economy.”

She says total department budgets will grow 2.3% in real terms and claims she is able to “allocate £190 billion more to the day-to-day running of our public services over the course of the spending review… compared to the previous government’s plans”.