The housing secretary has been pushing the chancellor for billions of pounds more for affordable housing, which she argues will be needed to hit Labour's target of building 1.5m new homes across five years.
Sources say, however, that the chancellor has made it clear that there will not be enough money available in this spending review for an immediate cash injection.
The standoff is the latest sign of the tensions across the cabinet over both the budget and spending review, with several ministers yet to sign off on their individual departmental settlements.
Rayner is understood to have stressed to the chancellor that social housing should be seen as a key part of the government's growth agenda.
She told a panel at the Labour conference last month: "I think it's a moral mission with the Labour government to recognise the problem and to build the social housing we need... But hopefully at the spending review, you'll see this government is really serious that we're going to build those houses we desperately need."
Treasury sources, however, say they are not able to meet every department's spending demands given the tight constraints.
This story is from the October 18, 2024 edition of The Guardian.
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This story is from the October 18, 2024 edition of The Guardian.
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