Ministers and town hall chiefs at odds after overhaul of planning rules

Ministers were at odds with town hall chiefs tonight after the Government ordered an overhaul of planning rules designed to get tens of thousands more homes built.

David Cameron and Nick Clegg hailed the move as crucial for breathing life into Britain’s flat-lining economy as it would trigger a new round of house-building.

But the Local Government Association (LGA) countered that the block to construction projects was not planning red tape but the economy’s weakness. It said planning permission had been granted for 400,000 projects, but developers and householders had not pressed ahead with them.

The Coalition’s most controversial move was to make it easier for rules to be waived that require developers to include a proportion of low-cost homes in major projects. It argued that the step would enable work to begin on stalled building schemes across the country.

Mr Clegg said: “Instead of having developers sitting for five years on useless land where nothing has happened, no young people are being employed on construction sites, no affordable homes are being built, no new houses are being built for first-time buyers, we are saying: 'Let's undo that knot at an earlier stage’.”

The Government also announced that £10bn of mortgages would be guaranteed by the Treasury in an initiative that could fund 75,000 new homes and create up to 140,000 building jobs.

Under a separate £300m scheme, up to 15,000 affordable houses will be built and another 5,000 empty homes brought back into use.

But Sir Merrick Cockell, the LGA’s chairman, said the planning system was not the problem and the moves would not tackle the deeper problems deterring house-building and buying.

“The stalled economy is stifling demand in the housing market and much needed development is being held up because buyers can’t buy and developers can’t sell,” he said.

The LGA is also dismayed at plans to allow developers to appeal to national planning inspectors when developers believe town halls are dragging their feet. It warned that the move would undermine local support for contentious schemes.

Hilary Benn, the shadow Communities Secretary, said: “Those who are looking to buy are finding it hard to get mortgages or raise the deposits needed, and house builders, who already have planning permission, are not progressing those developments because they don't think people will buy the houses.”

The announcements came as new official figures revealed that 51,000 people are now in temporary accommodation having been officially classed as homeless. Almost 40,000 of them had dependent children.

The figure is 7 per cent up on last year – and a two per cent rise on the last quarter.

Campbell Robb, the chief executive of the housing charity Shelter, said he expected the situation to worsen.

“These figures show that over 1,000 more households were accepted as homeless compared to the same time last year,” he said.

“As the impacts of the recession continue to bite and further cuts to the housing safety net hit next year, thousands more struggling families could be tipped into homelessness.”