A radical overhaul of planning rules aimed at boosting the building of much more affordable homes will be announced by the government this week as it confronts the economic and social legacy of 14 years of Tory rule.
Deputy Prime Minister Angela Rayner will unveil a new national planning policy framework to MPs on Tuesday before they leave for the summer recess, in a move that will tighten requirements for significantly more affordable homes to be built in areas of need from this autumn.
Write for the Observer Ahead of the announcement, Rayner said that since entering government, ministers have uncovered a “frankly scandalous legacy” that lies “under every stone they lift”.
She says that with so many people struggling to find housing or a roof over their heads, “providing social and affordable housing at scale” is her “number one priority”.
“We simply don’t have enough housing,” she wrote. “In the death throes of the Tory government, which has run out of steam, they have given up on governing and compounded their failure on housing. In the first three months of this year, work has started on 41% fewer homes than in the same period in 2023.”
Rayner’s decision follows Chancellor Rachel Reeves’ announcement on Monday of the results of a Treasury audit into Labour’s spending legacy.
In preparing the public for the tough choices ahead – on spending and tax – Reeves is expected to reveal a larger-than-expected “black hole” of around £20bn between spending and revenue.
A government spokesman said the audit showed that “the previous government made significant funding commitments for this financial year without knowing where the money would come from”.
The spokesman added: “The assessment will show that Britain is ruined and broken – exposing the mess that populist politics has created in the economy and public services.”
Keir Starmer and his ministers will continue to blame the last government for a series of decisions they are set to make in the coming months that will prove controversial and unpopular, including some likely tax rises in an autumn budget and tight spending restrictions.
Last week, Starmer suffered his first Labour rebellion over his refusal to end the two-child limit on welfare benefits, leading to him suspending the whip of seven of his MPs for six months.
On Saturday, the The Financial Times Keanu Reeves has been reported to be set to delay a number of unfunded road and hospital projects. There is speculation that she could halt a £1.7 billion road tunnel project under Stonehenge, as well as the Lower Thames Crossing, a 14-mile road and tunnel project under the river that is expected to cost £9 billion.
But ministers are also ready to tackle what they see as an urgent need to start repairing public services and generating economic activity.
Unlike the Conservative-Liberal Democrat coalition, which has embarked on a period of widespread austerity across the state, Reeves is expected to accept a deal on above-inflation pay for millions of public service workers, including teachers and NHS staff. Pay bodies representing the groups have recommended increases estimated at around 5%, which ministers have said could be met in full to avoid more damaging and costly strikes.
Increasing housing construction by breaking down bottlenecks in the planning system is seen as a way to start generating economic growth and address a growing supply and affordability crisis.
Sources close to Rayner, who grew up in a social home in Stockport, said she was focused on creating more social housing. There are 4 million households in the social rented sector, but nearly 1.3 million households are on waiting lists for social housing.
During the 13 years of Labour government, between 1997 and 2010, almost 363,000 new social homes were delivered, compared to just over 171,000 during the 13 years of Conservative rule, between 2010 and 2023. Of these, 45% (over 77,000) were delivered in the first two years, meaning they were likely the result of the affordable housing programme introduced by the previous Labour government.
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Jeremy Hunt, the shadow chancellor, said Labour’s claims that he had suddenly discovered the public finances were in such a dire state were entirely false.
“Since we created the OBR [Office for Budget Responsibility] In 2010 the accounts were opened wide and what they show is a healthy, growing economy – not the fiction that Labour is selling today, which is widely rejected by independent commentators.
“Their motivation is clear: having promised not to raise taxes 50 times before the election, they now need a pretext, but trying to rip off the British people so soon after being elected is a high-risk strategy doomed to failure.”
Rayner made clear she would take on Conservative opponents of new housing.
“This Labour government is not afraid to take tough decisions in the national interest to drive growth in every part of the country. We were elected with a mandate to build the homes Britain needs and to make the tough choices to unlock the planning system and make it happen. When it comes to building homes, we will no longer ask ourselves ‘if’, but ‘how’.
“Delivering social and affordable housing at scale is not only my number one priority to ensure everyone has a safe roof over their head. It is also a crucial step on the road to building 1.5 million homes, which will see the sector out of this crisis. That is why we will take action to inject confidence and certainty into the social housing system, so that councils and private providers can get back to building.
“Local leaders who know their region best will be key to helping us achieve these bold ambitions.
So we will work with local communities to plan new homes in the best possible locations, with the supporting infrastructure, public services and green spaces that residents need.
“We will also make brownfield development our top priority and ensure that a green belt established in the mid-20th century works well for the 21st century.”
