Our overview of the Ministry of Housing, Communities & Local Government (MHCLG) examines its spending and performance. It brings together insights from our reports and other publicly available sources including the MHCLG’s annual report and accounts.
Jump to downloadsKey takeaways
Financial management
Strategic priorities: The Ministry of Housing, Communities & Local Government’s (MHCLG’s) overall objective is to build good‑quality homes, drive economic growth and facilitate strong communities where people can live, work and thrive. It has three core goals to help deliver this objective: ensuring everyone has a safe, secure, and affordable home; giving people greater control over their lives; and strengthening community resilience with restored pride in place.
Financial position in 2025-26: MHCLG incurred total net spend of £51.1 billion in 2025‑26. Grant funding to other bodies was the most significant component of this net spend, with local government bodies receiving most of this support. MHCLG also holds assets with a total value of £18.9 billion. The largest assets were the Help to Buy home equity loans portfolio at £13.5 billion, other loans and investments (£2.7 billion), and Homes England’s property assets (£1.0 billion).
Key achievements in 2025-26:
- Announced £39 billion for the Social and Affordable Homes Programme
- Devolved over £1 billion in funding through the first Integrated Settlements
- Launched the National Housing Delivery Fund and National Housing Bank
Messages from our financial audit and value-for-money work
Financial management: MHCLG continues to operate within its budget, reflecting a clear commitment to financial management and good forecasting. In 2025‑26, MHCLG provided over £1 billion of devolved funding through Integrated Settlements. This is likely to continue to increase in future years as more Integrated Settlements are agreed. Housing and planning capital spend increased due to additional funding for building remediation and affordable homes, and an uplift on the Local Authority Housing Fund. An internal savings and efficiencies drive allowed MHCLG to free up funding for a new £300 million High Streets Fund.
Productivity: The Comptroller and Auditor General’s (C&AG’s) audit reports continue to highlight the potential for errors in the modelling used to value the Help to Buy equity loans portfolio.
In 2026, for a third consecutive year, the C&AG disclaimed the Whole of Government Accounts, for reasons including a lack of audited accounts for English local authorities. More councils published accounts by the relevant deadline, but a large proportion of these continued to be disclaimed by the external auditors.
MHCLG has linked its efficiency plans to workforce reform, digital transformation and funding simplification. It has simplified local government funding arrangements, reduced consultancy expenditure and is investing in digital services and artificial intelligence (AI) capability.
Risk and resilience: MHCLG identified 12 principal risks as of March 2026, including risks relating to housing supply, homelessness, building safety, local government financial pressures, and local government reform. Our recent work highlights challenges relating to limited capacity in the local government and housing sectors, incomplete performance information, fragmented funding arrangements and financial pressures in local authorities.
Looking ahead: Key developments likely to shape MHCLG’s work in 2026‑27 include:
- Local government reorganisation
- Local government financial sustainability
- Delivery of the Social and Affordable Homes Programme
- Delivering devolution commitments set out in Rewiring the State
- Planning reform