A report by the centre-right think tank has argued that Burnham’s council homes drive will end up costing the public purse a fortune rather than saving money.

To fund the council housebuilding programme, Burnham is reportedly planning to redirect the £39bn of public spending already allocated through the government’s Affordable Homes Programme.

Last week, in his first speech since Keir Starmer’s resignation, Burnham said: “Britain has lost almost 1.5 million council homes since the 1980s and around the same number of people are now on housing waiting lists and have been there for a very long time.

“As a result, the country is in a housing trap. We are forced to chase rents in the private-rented sector through the benefits system.

“When governments try to control these costs by freezing Local Housing Allowance, it makes families homeless and places unfunded pressures on councils when they have to pay for temporary accommodation.

“Britain’s housing crisis is having a ruinous impact on its public finances.

“So, working with local areas, No 10 North will oversee the biggest council house building programme since the post-war period.”

However, the CPS argues that building more council homes is not the answer and will cost the taxpayer billions.

CPS head of housing and infrastructure Ben Hopkinson claims that £39bn over ten years may deliver only 5% of the government’s annual housing target.

He cites The Housing Forum’s recent estimates that the cost of building a three-bedroom, semi-detached house now comes to £251,700, even if the land is provided for free.

This means £3.9bn per year would cover just 15,494 houses, but Hopkinson argues the numbers could be even lower.

He sets out the various ways in which social housing is further subsidised by the taxpayer, both explicitly and implicitly.

Hopkinson says: “First, social homes are let out at a cost below what it costs to maintain them, meaning the taxpayer is continually forced to plug the gap and the upfront cost of building is never repaid.

“The average English social rent home charges £5,942 a year but costs £6,280 a year in maintenance and management costs, creating a small ongoing liability.

“In London, the average social rent home has a rent of £7,380 a year but costs £8,720 a year to maintain.

“That means that each London social rent home will never recover the initial capital investment, instead creating an ongoing liability of £1,340 a year.”

He continues: “Second, in 2024/25, the UK spent £36bn on housing benefit and the Universal Credit Housing Element.

“England accounted for £32bn of this housing subsidy.

“The UK already spends the highest percentage of GDP on housing allowances of any OECD country, double the French rate. “

Hopkinson says that if Burnham pursues increase the Local Housing Allowance, a policy he supported as Manchester Mayor, it would drive the subsidy even higher.

He adds: “Third, the average social home is let out for £10,250 less than the average privately rented property – despite being on average newer, less densely occupied, and in London, larger.

“Across England’s roughly 4.2 million social homes, this amounted to an implicit subsidy of £43bn a year in 2025.

“Once you add together the explicit and implicit subsidies for public housing, it is costing the country an astonishing £79bn a year in England alone.”