Housing secretary Angela Rayner and housing minister Matthew Pennycook have written to every council leader demanding authorities “scale up now” as the Government seeks to deliver the biggest council house building programme since the early 1980s.

Councils are being asked to review plans for increasing council housing supply. This includes examining their financial capacity, scope for use of Right to Buy receipts, maximised Section 106 opportunities and identifying council-owned land and buildings that could be developed.

Town halls have been told to prepare ambitious bids for remaining funding under the £39bn Social and Affordable Homes Programme and identify barriers preventing schemes being brought forward more quickly.

The letter said: “Every council must consider how they can stretch every pound and every site to build council homes.

“I recognise that councils are starting from different positions, but I expect every council to scale up now.”

Authorities have been sent a questionnaire requiring details of planned council homes, use of Right to Buy receipts and developer contributions, available land and any further Government support or financial flexibilities needed.

Most councils have been told to respond by 22 September, with London boroughs given until 16 October.

Responses will feed into Government thinking ahead of the Autumn Budget.

The call comes as ministers confirmed the first £9.6bn of strategic partnership funding under the new Social and Affordable Homes Programme.

Cambridge City Council, Eastleigh Borough Council and Newcastle City Council have become the first councils to secure Homes England strategic partnership status.

£9.6bn first wave of affordable homes drive awarded yesterday

More than £16bn of programme funding outside London and around £5bn in the capital remains to be allocated.

Ministers said future awards would increasingly prioritise social rent and council housing, with plans also being considered to raise the funding cap for councils buying existing homes while they build up their direct development capability.

Councils will also receive extra help through a revamped Capacity to Build programme, backed by an additional £46m over the next three years.

The Government said this would support councils to establish development pipelines, tackle delivery barriers and build specialist housing and planning teams.

Rayner and Pennycook also signalled that greater control over affordable housing funding would progressively be handed to strategic mayoral authorities outside London as the programme develops.