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Prescott scheme is short on detail and long on promises

John Prescott has blamed decades of inaction for a crisis in housing as he outlined sweeping measures yesterday that he claimed would allow thousands of families to gain a foot on the property ladder.

He promised action to tackle the rocketing cost of homes in London and the South-east, while announcing a new scheme to support house building in the Midlands and the North, where the value of houses is often less than the cost of building them.

He estimated at least 200,000 new homes could be built in four areas around London: the Thames gateway in east London, Ashford in Kent, Milton Keynes, and an area between Stansted and Cambridge.

But new planning rules will insist on at least 30 new homes per hectare (two-and-a-half acres). Ministers want architects to respond with dynamic new designs to make better use of land without recreating tower blocks or back-to-back Victorian housing.

Mr Prescott's package of reform includes some radical changes to the planning system, including intervening to send "hit squads" of officials into local authorities that fail to meet targets for house building. County councils will lose the right to determine local development through county structure plans. Planning will be transferred to regional bodies.

Proposals to also hand over planning controls for major infrastructure projects such as airports have been abandoned, however, although ministers will try to streamline the cumbersome system of planning appeals, which can take years and cost millions of pounds.

Mr Prescott insisted at least 60 per cent of new development would have to be built on "brownfield" sites. But officials admitted the existing green belt may have to be redrawn to cope with new development.

In a separate set of measures, Mr Prescott also announced action to help local authorities improve the quality of their social housing stock, and promised legislation to crack down on unscrupulous private landlords who profit from housing benefit while keeping tenants in sub- standard accommodation.

Despite the fanfare surrounding Mr Prescott's announcement, few details have been finalised. Mr Prescott promised to return to the Commons after the summer to outline detailed reforms after talks with local council leaders.

Yesterday, Mr Prescott faced criticism from the Conservatives and MPs worried about development in suburban and rural areas. Eric Pickles, the Conservative local government spokesman, warned: "The Government will feel the frustration of this half thought-through attempt to sort out the country's housing planning. Make no mistake, this is a crisis entirely of the Government's own making."

He attacked the Government's aim to abolish county structure plans as a "grave mistake" that would "ride roughshod over communities and roughshod over local democracy". The Tory front-bencher Damian Green said his Ashford constituency had been highlighted as a potential high-growth area. He warned: "If you choose to go for a high-growth option in and around Ashford you will not only be convicted of environmental vandalism towards this part of Kent but also showing the consultation exercise you have been indulging in for the past year would look like a complete sham."

Mark Francois, Conservative MP for Rayleigh, said: "As planning powers come – quite rightly – with locally elected councils, what is the point of people continuing to vote in local elections if the councils they subsequently elect can then have thousands of houses rammed down their throats by regional quangos?"

But the reforms were welcomed by business leaders. John Cridland, deputy director general of the Confederation of British Industry, said: "The Government deserves praise for pushing these proposals through while addressing business concerns. It would have been disastrous if we had blown this huge opportunity to reform our absurdly slow planning system."

The House Builders Federation said the booming housing market was being caused by a shortage of properties, and called for the planning system to be speeded up.

Robert Ashmead, the federation's chief executive, said: "The country needs to be able to provide a home to all those who want one. At present, we are falling short by more than 50,000 every year.

"Apart from ensuring house prices increase as more and more people compete for homes, we are looking at what could turn into a social crisis unless something is done."

The main points

*At least 200,000 homes could be built in and around London. Ministers are considering huge new developments in the Thames gateway in east London, Ashford in Kent, Milton Keynes, and the area between London, Stansted and Cambridge.

*John Prescott said he would use powers to intervene where authorities failed to meet targets for development.

*Plans to give MPs the power to decide on major projects such as airports have been dropped but proposals to speed up cumbersome public planning inquiries will go ahead.

*Three new "millennium communities" will be created, in East Ketley, near Telford; Milton Keynes, and Hastings.

*A Housing Inspectorate will be created with powers to crack down on unscrupulous private landlords.

*New developments must include at least 30 homes per hectare (two and a half acres), to discourage large executive estates in favour of denser social housing.