Local authority leaders have welcomed the first wave of funding from the Government's £39bn Social and Affordable Homes Programme as a ‘positive step’ but warned it was ‘crucial’ councils remain at the heart of delivery.

Prime Minister Andy Burnham and Secretary of State Angela Rayner yesterday announced they were releasing almost £10bn to build more than 70,000 homes across England.

The money will go to 33 strategic partners – councils, housing associations and other providers – with around 60% of homes earmarked for social rent, the most affordable form of rented housing.

A Government statement said the funding marks a return of councils to the ‘heart of housebuilding’ and is aimed at helping families out of temporary accommodation and off lengthy waiting lists, with almost 180,000 children currently without a permanent home.

Over £2bn will be spent in mayoral areas outside London, with more funding expected to flow directly to mayors as the 10-year programme develops. London itself will get a major boost, with the Greater London Authority set to offer at least £6bn.

The package also includes £46m to strengthen councils' housebuilding skills and capacity, alongside continued use of Right to Buy receipts, which raised £1.61bn last year.

The PM has been accused of backtracking on an earlier commitment – made before he became Prime Minister – that the entire 10-year £39bn affordable housing budget for England should be spent on homes for social rent.

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‘Nearly £10bn will go to councils and housing associations to build genuinely affordable homes, most of them for social rent, in the places where families are waiting longest,’ said the PM.

‘Councils built this country out of a housing crisis once before. Backed properly, and trusted to get on with it, they will do it again.’

Responding to the announcement, Cllr Liam Robinson, chair of the Local Government Association’s (LGA) Inclusive Growth Committee, said: ‘The confirmed allocation of the first phase of the £39bn fund and the increased Capacity to Build funding is positive step to achieving this ambition.

‘Given the key role for councils in delivering these homes, it is crucial they remain at the heart of delivery. Mayors should work closely with local authorities in their areas to achieve the most from this money, with councils also having sustained access to preferential borrowing rates to support viability.’

The Mayor of London, Sadiq Khan, said: ‘Thousands of Londoners will benefit from this new wave of new social and affordable homes, which will help people out of temporary accommodation and provide good, affordable homes to live in for the long-term, as we build a fairer, better London for everyone.’

Richard Parker, Mayor of the West Midlands, added: ‘We've already started turning around years of underinvestment in social housing but the Prime Minister’s announcement today will see us work together as a region and take this social housing mission to the next level.’